Dive Brief:
- Oracle doubled down on multicloud Tuesday, launching a Google Cloud integration to eliminate data transfer charges and extending an existing Microsoft partnership to deliver compute capacity to OpenAI.
- Google Cloud opened its Cross-Cloud Interconnect solution in 11 Oracle cloud regions and will roll out a cloud database integration service later this year, the companies said. In a similar move, Microsoft installed Oracle database servers in its Azure ecosystem last year.
- “As on-premise databases migrate to the cloud, either to OCI directly or using Database@Azure or Database@Google Cloud, we expect these cloud database services will be that third leg of revenue growth, alongside OCI and strategic SaaS,” Oracle CEO Safra Catz said Tuesday, during the company's Q4 2024 earnings call.
Dive Insight:
Oracle’s shift from software to cloud reached an inflection point earlier this year, as its infrastructure services business eclipsed license support revenue for the first time.
The trend has continued, with the company’s cloud infrastructure revenue growing 42% year over year, to $2 billion during the three-month period ending May 31. Oracle’s total cloud revenue for FY2024 grew to $19.8 billion, increasing 25% from FY2023, the company reported Tuesday.
“Q4 marks the full emergence of our high-growth cloud business,” Catz said. “Now, customer conversations are absolutely fully focused on our cloud services.”
A latecomer to cloud and a junior member of the hyperscaler club, Oracle has been racing to expand its capacity. Chairman and CTO Larry Ellison pledged to invest $10 billion in data centers this year, during a March earnings call.
Currently, Oracle has 76 active cloud regions, compared to the 68 that were live in March. The company is building 19 public cloud regions to add to the 47 currently active, Catz said.
Capturing AI workloads is one pillar of the company's data center strategy.
Ellison said the company inked more than 30 AI contracts totalling over $12 billion in Q4 and $17 billion for the year. OpenAI is one of the larger players tapping into Oracle Cloud Infrastructure for added capacity.
“OCI will extend Azure’s platform and enable OpenAI to continue to scale,” CEO Sam Altman said in a release.
Nvidia, Cohere and xAI are three other AI development companies running workloads in Oracle cloud, Ellison said.
Removing barriers to multicloud integrations through hyperscaler partnerships is also central to Oracle’s plans.
“It’s very important that all the clouds become interconnected,” Ellison said, as he outlined his vision for a multicloud future.
“We'll get rid of these fees for moving data from cloud to cloud, and all the clouds will be interconnected and customers can pick their favorite service from their favorite cloud and mix and match whatever they want to use and do it easily and seamlessly,” Ellison said.
