Oracle Strengths, Domain Expertise, and Key Differentiators
After investing heavily in its Cloud infrastructure to have 44 cloud regions by the end of 2022, Oracle has set its sights on its core strength - product innovation. In the Cloud ERP market where it dominates, each new release could bring more than 1,000 new features and increasingly the vendor is switching on the machine learning spigot to spur product development. Additionally, the vendor is banking on its heavy investments in neural network and machine learning technologies to speed product releases, along with the coupling of its Cloud-native autonomous database to run programs more efficiently, securely and at low-cost without the intervention of manual labor for software patching and debugging.
As of September 2021, Oracle has secured 8,200 Oracle Fusion ERP customers with 6,400 having already gone live as the vendor delivering rapid Cloud activation to accelerate the innovation push among a growing list of large and mid-sized enterprises. Their innovation journey marks a major milestone as they first go live with Cloud ERP to improve speed to decision, then use AI tools like Intelligent Document Recognition to sift through journal entries, supplier documents and finish off with continuous feedback to help Oracle stabilize these Cloud apps every quarter and perfect them for other users.
The crux of Oracle Cloud ERP is continuous and cutting-edge innovation – more than 15 years in the making – that leverages its Gen 2 Cloud Infrastructure to mitigate integration and implementation risks for the most complex IT and back-office environments.
The latest Oracle 21c Fusion Applications update extends beyond financial management with such new features as conducting complex procurement for both goods and services to mitigate supplier risks, drilling down into procurement and supplier performance analytics and classifying spending patterns, assessing supplier health and verifying supplier data for speedy onboarding, as well as practicing project-driven supply chain in asset-intensive industries with disparate design, engineering, production and assembly operations.
Oracle is expected to double down on its CX applications by marrying digital advertising, lead-generation, and lead-qualification into a fully integrated online selling system. One of the recent wins of Oracle CX is Aon, which experiences considerable value by consolidating six different CRM apps into an Oracle Cloud system with fully integrated CX features. In the HCM market where Oracle saw a 35% spike in Fusion Cloud HCM sales in 4Q21 after a 23% rise in 3Q21, the vendor aims to combine increased use of AI and machine learning, better Employee Experience access to all backend systems, while reinforcing the needs to ensure diversity and inclusion, and enhanced cybersecurity protection for work from home employees.
Oracle Recent Developments
Oracle ended its fiscal 2021 by becoming one of the fastest-growing Cloud providers as the 44-year-old enterprise software vendor is gearing up to move past the pandemic. Oracle grew the most in both the Cloud Infrastructure As A Service(IaaS) and Cloud ERP markets among the leading vendors as the Austin company continues to expand beyond its database stronghold.
Oracle saw a 119% jump in IaaS revenues in 2020. In addition, Oracle topped the Cloud ERP market in 2020, ahead of the second-ranked Intuit by a margin of two to 1 in Cloud revenues and the fifth-ranked SAP by a margin of three to 1. Oracle ended its fiscal 2021 on May 30 without skipping a beat, achieving a 36% jump in earnings on record revenues of $40.5 billion, a 4% rise and the highest in its history. In its fourth quarter, Oracle posted a 8% growth in revenues including a 11% jump in applications cloud services and maintenance fees.
In fiscal 2021, Oracle Cloud Infrastructure more than doubled to post $2.3 billion in Cloud subscription revenues. Our IaaS estimates for OCI were $1.9 billion in 2020, up 119% with a steeper ramp than its bigger rivals. In 4Q21, Oracle reported a 46% jump in its Fusion Cloud ERP business contributed to an annualized revenue of $4.4 billion for its back-office apps. Our research shows Oracle Cloud ERP(including both Fusion ERP and NetSuite) amounted to $3.1 billion in Cloud subscription revenues in 2020, up 33% from 2019, the highest growth rate among the top 10.
Oracle Autonomous Database, which is being touted as the next-generation database technologies with minimum amount of tuning, patching, and intervention involving database administrators, is another product ideally suited for the new era of social distancing and remote working. The revamped Exadata [email protected] plan now allows its on-premise customers to deploy Oracle Autonomous Database in their own datacenter, making the new database more readily available to its vast installed base that exceeds 250,000.
In one of our recent surveys of more than 350 implementations of Oracle Autonomous Database in Western Europe and the US, our research shows 75 have already gone live in the first five months of 2020, compared with 140 for the full year of 2019, suggesting that despite the pandemic there is still healthy appetite for and considerable need to activate new technologies – especially those that can help tackle essential tasks like transaction processing, data warehousing and other regular database workloads.
Then, there is the surging demand for Oracle Cloud Infrastructure, which has signed up a number of popular cloud services like Zoom and 8×8, online video conferencing applications that have seen skyrocketing usage because of the shelter in place restrictions that force many employees to work from home.
At the product level, Oracle extended free applications and services to its customers in such areas as Workforce Health and Safety, Employee Care, Scenario Planning as part of what we refer to Enterprise Essentials applications designed to bolster recovery efforts of pandemic-ravaged organizations. The same was true in areas such as Food and Beverage, where Oracle offered free assessments of restaurants (from chains, to independents) to help them navigate the pandemic and quickly hook up new services such as online ordering and delivery. The vendor is also opening up the Oracle Analytics Cloud to a range of Oracle Cloud applications from Fusion ERP to Fusion HCM, in addition to other third-party cloud software data sources, thus generating more useful dashboards and insights for millions of users. In some of these use cases, Oracle Analytics Cloud, along with these apps, can cut lead time by two-thirds for functions such as contingent hiring during the pandemic or reducing 18 to two hours when running ETL tasks.
In FY20, Oracle also shored up its CX applications by improving their performance with the use of Oracle Autonomous Database, the new Oracle Redwood interface, as well as the Oracle Cloud Infrastructure. Oracle also acquired Crowdtwist for its customer loyalty applications last October, in addition to strengthening the CX ecosystem by partnering with Google and Zilliant, which will integrate CX Service and CX CPQ into their messaging and pricing products, respectively.
The same commitment to delivering ease of integration is also evident in Oracle Hospitality, the former MICROS operations, which aims to provide a complete set of REST APIs unified in a single platform for its partners that will have access 3,000 API capabilities in order to introduce a range of touchless, social distancing and self-service options for hotels, quick service restaurants and other guest-driven venues, all of which are adapting to a new operating model in the post-pandemic world. The same for Food & Beverage with MICROS, now offering 80 integrations that have been essential in helping restaurants transition in the pandemic to contactless payment, delivery, and more. Like CX, Oracle's Industries solutions group (The Global Business Units), spanning nine industries (Communications Applications and Networks, Hospitality, Retail, Food and Beverage, Financial Services, Construction and Engineering, Heath Sciences and Utilities) also fortified their performance and security by moving to Oracle Cloud Infrastructure. Oracle continues to make significant enhancements across its Global Business Unit solutions. These include adding new machine-learning driven inventory management capabilities for retailers to navigate changes in demand during COVID-19, to new cloud-capabilities to help mid-size banks fight financial crime, to helping utilities use the latest enhancements in behavioral science to help customers save money and energy. Moreover, Oracle is driving deeper integration between its back-end solutions and the depth of the GBU offerings to help customers solve complex challenges. In October, Oracle launched a jointly developed CX + Communications GBU solution to help the communications industry better engage, attract and retain customers with unique packages and offers.
Oracle Mergers and Acquisitions (M&A) Activities
Following the completion of its $28-billion purchase of Cerner, Oracle outlined a number of initiatives including the use of artificial intelligence modeling for disease management, and digital assistants for better practice management and patient engagement. The vendor also highlighted how Cerner’s EHR systems integrated with Oracle Fusion Cloud Applications could help healthcare customers manage their workforce and schedule health practitioners while enabling them to leverage the latest procurement, blockchain, and RFID solutions when authenticating and ordering medical supplies.
Oracle NetSuite acquired Adi Insights to provide those added workforce capabilities to SuitePeople, NetSuite's human resource management solution. Workforce management software helps businesses increase employee efficiency and productivity. It allows managers to optimize the deployment of people while considering productivity, compliance and financial impact. n June 2021, Oracle completed the acquisition of GloriaFood for global online ordering system and marketing solutions to enable restaurants of all sizes to go digital and serve customers directly through the web, mobile, and apps. In April 2021, Oracle acquired FarApp for eCommerce, logistics, retail and hospitality connectors for Oracle NetSuite. The acquisition is expected to enable a more seamless and unified experience for NetSuite customers.
Oracle Customers in ARTW Customer Database
Leveraging a rigorous data-centric research methodology, APPS RUN THE WORLD asks the simple question: Who’s buying Oracle applications and why? And we provide the answers – supported by decades of research – to our clients around the world. Our Customer database has over 100 data fields that detail company usage of Oracle and other enterprise apps by function, customer size, industry, location, implementation status, partner involvement, Line of Business Key Stakeholders and IT decision makers contact details. List of Verified Oracle ERP Cloud, Oracle Analytics Cloud, Oracle CX Cloud, Oracle Data Cloud, Oracle EPM Cloud, Oracle ERP Cloud, Oracle HCM Cloud, Oracle Hospitality Cloud Solutions, Oracle PPM Cloud, Oracle SCM Cloud, Oracle Social Cloud, Oracle Utilities Cloud, Oracle Utilities Opower Cloud, Textura Cloud Solutions, NetSuite ERP, NetSuite HCM, NetSuite OneWorld, NetSuite PSA, NetSuite SCM, NetSuite SuiteCommerce, along with scores of industry solutions for banking, life sciences, utilities, and other verticals. customers.
Ownership: - NasdaqGS : ORCL
Number of Employees: 143000
Functional Markets: Analytics and BI, Collaboration, Content Management, CRM, eCommerce, EPM, ERP Financial, ERP Services and Operations Management, HCM, ITSM, PLM, PPM, Procurement, SPM, SCM, TRM, PaaS, IaaS,
Key Verticals: Aerospace and Defense, Automotive, Banking and Financial Services, Communication, Construction, Real Estate, Consumer Packaged Goods, Distribution, K158, Higher Education, Federal Government, State and Local Government, Public Safety, Healthcare, Life Insurance, P&C Insurance, Specialty Insurance, Leisure and Recreation, Hospitality, Life Sciences, Manufacturing, Media, Faith-Based Nonprofit, Youth and Elderly Care, Special Cause Nonprofit, Oil and Gas, Chemicals, Professional Services, Retail, Transportation, Utilities,
Oracle Key Enterprise and Cloud Applications
Oracle ERP Cloud, Oracle Analytics Cloud, Oracle CX Cloud, Oracle Data Cloud, Oracle EPM Cloud, Oracle ERP Cloud, Oracle HCM Cloud, Oracle Hospitality Cloud Solutions, Oracle PPM Cloud, Oracle SCM Cloud, Oracle Social Cloud, Oracle Utilities Cloud, Oracle Utilities Opower Cloud, Textura Cloud Solutions, NetSuite ERP, NetSuite HCM, NetSuite OneWorld, NetSuite PSA, NetSuite SCM, NetSuite SuiteCommerce, along with scores of industry solutions for banking, life sciences, utilities, and other verticals.
Oracle Revenues, $M:
|Type/Year||2020||2021||YoY Growth, %|
|Total Revenues, $M||Subscribe||Subscribe||Subscribe|
|Enterprise Applications Revenues, $M||Subscribe||Subscribe||Subscribe|
|Cloud Applications Revenues, $M||Subscribe||Subscribe||Subscribe|
* Enterprise Applications Revenues = License + Support & Maintenance + SaaS
** All revenue figures are estimates based on public records, Cloud and Non-Cloud business models in Apps Run The World's vendor database, and annual survey results including vendor feedback.
Oracle Revenue Breakdown By Type, $M:
|Type||License||Prof. Services||Hardware||Support & Maintenance||SaaS||PaaS||IaaS||Other (Non Enterprise Application Revenues)||Total|
|% of Total Revenues||Subscribe||Subscribe||Subscribe||Subscribe||Subscribe||Subscribe||Subscribe||Subscribe||100%|
Oracle Enterprise Applications Revenues By Functional Markets, $M:
Oracle Enterprise Applications Revenues By Verticals, $M:
Oracle Revenues By Region, $M
|Region||% of Total Revenues||2021 Total Revenues, $M||2021 Enterprise Applications Revenues, $M||2021 Cloud Applications Revenues, $M|
Oracle Direct vs Indirect sales
|Region||Direct Sales||Indirect Sales||Total|
Oracle Customers - Breakdown by Geo, Size, Vertical and Product
List of Verified Oracle Customers
No. of Oracle Customers: 430000
No. of Oracle Enterprise Applications Customers: 430000
No. of Oracle Cloud Customers: 30000
No. of Oracle Cloud Subscribers: 45 million
The number of Fusion ERP customers has exceeded 8,200 as of September 2021, while the installed base of NetSuite customers has expanded to 27,000, up from 11,000 five years earlier when it was acquired by Oracle.
On the HCM side, Oracle has more than 3,300 customers for its Cloud HCM applications primarily for Core HR. It also sells to thousands of customers for its talent acquisition product. Our estimate is that Oracle has about 8,000 Oracle CX Cloud customers, including 3,500 that it picked up from acquisitions of Eloqua (1,000), Responsys (500), RightNow (2,000) and a string of smaller ones like Bluekai, Vitrue and Grapeshot since 2012. Oracle’s Fusion Cloud SCM applications, now exceeding 3,300 customers, compared with about 1,000 in 2018. Oracle has secured more than 20,000 Cloud apps customers including many that have purchased multiple products.
Other tucked-in acquisitions included BlueKai for marketing data management with 200 customers, LiveLook for customer service and support with 500 customers, TOA Technologies for field service automation with about 100 customers, and Datalogix for Data As A Service with 650 customers.
On the on-premise side, Oracle has more than 25,000 customers using such products as E-Business Suite, JD Edwards, PeopleSoft and Siebel. That does not include its industry-specific solutions like Micros for retail and hospitality, iFlex for core banking and PhaseForward for life sciences.
Altogether Oracle has nearly half a million customers worldwide.
Oracle Market Opportunities, M&A and Geo Expansions
Having moved a large amount of ERP workload to the Cloud on behalf of its customers, Oracle is boosting the innovation quotient by delivering enhancements like touchless invoicing. Also, AP and AR automation will be one of the key areas for 2022 as Oracle continues to expand the reach of its common data model, improved user interface and direct integration of its analytics tools.
Oracle Analytics Cloud has become the must-have reporting and analytical tool for small companies, beyond the large enterprises that it usually serves, as the analytics engine for back-office functions now supports Supply Chain Management in addition to ERP and HCM.
The pervasive use of analytics is beginning to be felt among its Oracle NetSuite customers. Recently, Oracle introduced SuiteBanking for AP/AR automation, cash management as well as invoice processing to strengthen cash position of its customers. By leveraging the Oracle Analytics Cloud, NetSuite also introduced NetSuite Analytics Warehouse for embedded decision-support capabilities for midmarket companies increasingly demanding intuitive big data and business intelligence tools to help them spot trends and execute financial and operational decisions. Additionally, NetSuite is adding Insight from Customer 360 to create a new kind of Customer Data Platform that aims to capture and create unified customer data records across different touch points from email to text.
At the vertical level, the company already has nine industries global business units that are focused solely on front-office solutions for utilities, hospitality, financial services, food and beverage, retail, life sciences, construction and engineering, and communications (networks and applications). For example, Oracle Textura now manages payments for construction projects valuing $1 trillion. Two more business units are on the horizon – State and Local and Healthcare. In industry cloud solutions alone, Oracle now offers 60 application skus, serving 100,000 customers and 16 million users.
That's where Oracle Fusion Cloud Procurement could become more strategic than ever in the post-pandemic era. The Cloud procurement offering is positioned as the nexus between its financial management and supply chain applications, allowing for optimized visibility into how one spends on its goods and services to capture maximum savings, while bullet-proofing its supply chain with sustainability in mind, a prerequisite especially for those with significant carbon footprint around the world. For example, Tetra Pak, the $13-billion packaging goods company, has recently implemented Oracle Cloud SCM in a multi-phase project designed to achieve advanced logistics support and optimized transportation management visibility. At Tetra Pak, the use of Oracle Cloud SCM greatly improves the different moving parts of its logistics operations, which in turns helps meet its sustainability target.
All of these workloads will eventually be running on the Oracle Cloud Infrastructure. Oracle is ready to take OCI to the next level by signing not thousands, but rather tens of thousands of new accounts every year in order to drive economy of scale needed to succeed following activation of scores of new Cloud regions over the past couple of years. Oracle plans to operate 44 cloud regions in total by the end of 2022. After posting more than $2.3 billion in subscription revenues in fiscal 2021, CEO Safra Catz said the vendor is planning to double its Capex on its cloud services to $4 billion – especially in propelling OCI further in its current year.
Oracle Risks and Challenges
During the pandemic, Oracle has been focusing on accelerating the digital transformation initiatives of its key accounts, while making increasing inroads into those that are consolidating their back-office and customer-facing systems around the Oracle Cloud stack. Even with $23 billion in cash at the end of 1QFY22, Oracle has not pursued major acquisitions - unlike the hearty appetite of its rivals. Instead, the vendor has committed to building out its Cloud infrastructure by adding more coverage to extend into at least 42 regions by 2022.
What that suggests is that Oracle is biding time until the middle of the decade to challenge both AWS and Microsoft for a healthy chunk of the Cloud infrastructure market especially among customers that are leaning toward a hybrid cloud strategy - meaning they would run their data centers through a combination of the top two or three cloud service providers.
Instead of engaging in hunting and gathering, Oracle is taking a different path by sustaining precious resources like customer successes and hard-to-replace assets like ERP and databases. The risk lies in giving up near-term market-share gains especially in fast-growing areas like robotic process automation, digital workplace, eCommerce, next-generation payments, etc.
Oracle may be preparing itself for an extended period of industry shakeout based on its recent decision to relocate from its long-time headquarters in the San Francisco Bay Area to a lower-cost city like Austin and other changes including streamlining its European operations by positioning Scotland, which aligns itself closer to European Union, as the buffer against the whims of the UK government following Brexit.
Suffice it to say that Oracle is showing a steady hand in the midst of a changed world, while taking the road less traveled.
Oracle Ecosystem, Partners, Resellers and SI
In September 2021, Oracle extended its OEM deal with Kaltura, the Video Experience Cloud with millions of active users, by making Kaltura's video content management, live streaming, real-time conferencing, interactive video paths, and visual marketing available across Oracle Cloud. Oracle has been a Kaltura customer since 2012. In 2019, Oracle and Kaltura announced an OEM partnership, which originally utilized Kaltura’s video-on-demand services and is now being extended to leverage all Kaltura media services. With the expansion of the strategic partnership, Cloud customers will be able to manage their on-demand, live, and real-time video content in Oracle’s universal content hub, and enrich that content with Kaltura’s tools.
The move is consistent with Oracle's direction to rely on ecosystem partners like Medallia, Tanium and others to help make OCI easier and cheaper to consume with striking results. In May 2021, Oracle announced it is providing tools, solutions, and support to fuel Arm-based application development. Developers can run Arms-compute instances at only one cent per core hour on OCI. Over the past year, Oracle has signed up a host of ISV startups including Aleph Alpha, Awini, Molecula, NeuralMed, Quant Networks and Snapper Future Tech to help them run different high-performance applications on top of OCI. Aleph Alpha, for example, is training a 13 billion parameter AI model on OCI using Nvidia’s GPUs connected by high-speed networking. A second Aleph Alpha model holds 200 billion parameters.
Much of its ecosystem expansion lies in developers and startups that Oracle is partnering to help sell the Oracle Cloud Infrastructure. After building out its marketplace on OCI, the vendor has attracted many ISVs that are listing their applications that are immediately accessible to customers under universal credit model pricing – meaning that they can run these products on a pay as you go basis.
Another way for Oracle to scale out its ecosystem is through Oracle Cloud free tier that developers can do development and testing work with an autonomous database, compute, storage, load balancing and monitoring, all on OCI under free tier service plan for an unlimited time.
Across its ecosystem, the number of Oracle partners has been rising steadily – now nearing 30,000 mark, compared with 25,000 a few years earlier. Much of the increase was attributed to increased use of Value Added Distributors like Avnet and Arrow that carry both hardware and software products. These VADs can support more resellers than what Oracle or Sun was able to fulfill their needs in the past.
Since 2012 Oracle has successfully upgraded its partners through more rigorous certification programs in 60 specialization areas for its hardware and software products. Hundreds of these specialized partners have been added covering tens of thousands of new Oracle Partner Network product specialists. The majority of Oracle's Cloud Solution Partners have been coming from firms like Accenture and Indian systems integrators. These partners also include Managed Service Providers that offer Cloud hosting support to ISVs. Overall speaking, channel contributions to Oracle's revenues have improved considerably as the vendor aims to drive more indirect sales in markets where it has a limited presence.
Oracle Cloud Infrastructure Insights
Subscribe to read more about:
- Oracle Public Cloud and Infrastructure (IaaS)
- Oracle Platform (PaaS)
- Oracle Application Delivery
- Oracle Private Cloud and Data Centers
Data used in research reports are derived from publicly available documents, continuous surveys of applications vendors, customers, resellers, Independent Software Vendors, systems integrators and other verifiable sources.
Vendor shares and market forecast results are based on a combination of existing databases as well as demand side and supply side research conducted throughout the year with validation from vendors, customers, channel partners and documentations such as earnings releases and 10Q and 10K filings, vertical industry studies, regional and country-level statistics from public and private institutions(i.e. colleges, universities, government agencies and trade associations).
For additional information on our methodologies, here's the link:https://www.appsruntheworld.com/About Us
Copyright © 2023, APPS RUN THE WORLD