"..it appears the Company’s transition to the cloud is taking longer than expected.” , and Oracle and other ""small players"" are losing market share to big players..
https://marketrealist.com/2018/04/why-oracle-stock-fell-13-4-in-the-last-10-days
4 replies (most recent on top)
It's headed downhill. Nothing is going to stop it. I think there will be a large drop in the stock each quarter after results are made public.
So, do I have this right, what you are saying is that its in Oracle best interests to NOT have the clients use the cloud credits b/c then their profits look better? But implicitly, the crash is coming b/c they only have so many "s---er" clients to sell cloud credit deals to; and those are running out. Is that right?
The cloud revenue numbers are worse than this chart shows. We are looking at an Enron scale implosion in the near future, and for the same reason - bogus revenue numbers that make the business look healthy. A large amount of Oracle, IBM, and Microsoft "cloud" revenue is cloud credits that are attached to on-premise renewal deals. At the end of the year, if the cloud credits are not consumed, they get recognized as revenue, even though the customer is not using the product. The law should require that these companies disclose this information, but it does not. "Hosted private cloud" is not cloud. It's IBM and Oracle sticking an expensive appliance like a mainframe or Exadata and running it in its own data center rather that at the customer site. This is NOT cloud. Cloud means automatically scaling up resources on demand as needed. You get more (or less) CPU, memory, network, and storage when you need it and pay for what you use. A hosted appliance requires the customer to pay in advance and does not scale with usage - you get XX CPU cores and XX storage, and to get more, you must buy more and give the vendor a long lead time. The hosted hardware business is shrinking rapidly and being replaced by real IaaS cloud. With real IaaS cloud, the customer must be successful; if the customer is not going into production successfully, they do not consume the service and are not billed. AWS and Google's revenue represent real consumption ... and note that those companies have higher revenue growth in cloud than the others.
Ooooops, the secret is out: oracle has no cloud. That cloud revenue, that’s cloud credits from on-prem customers in lieu of on-prem license payments, at a steep discount nonetheless. Cloud washing!