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Oracle expands to 45 megawatt cloud business in SaaS and PaaS push

Oracle expands its datacentre footprint as it pushes forward with its software as a service (SaaS) and platform as a service (PaaS) businesses

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Oracle is set to push out cloud services to prospective customers, the company revealed in its first-quarter 2016 financial results.

"We are entering the rapid growth, scale-out phase of our cloud business," Oracle executive chairman and CTO Larry Ellison said in the Q1 2016 earnings call, posted on the Seeking Alpha financial blogging site.

Ellison claimed the company’s datacentre capacity had increased 90x from 0.5 megawatts to 45 megawatts

"We have installed over 40,000 physical devices, a 100,000 virtual machines and over eight petabytes of storage. We now have in place the physical infrastructure to dramatically expand our cloud customer base. We are adding thousands of new SaaS, PaaS, IaaS and data customers to our existing datacentres. With all that customer growth on top of our existing infrastructure, we expect that our cloud margins will double from 40% to 80% over the next two years," he said.

Ellison said Oracle was on target to book between $1.5bn and $2bn of SaaS and PaaS business this fiscal year.

CEO Safra Catz said the company's cloud business grew 165% in the quarter. “The triple-digit bookings growth that we have been experiencing will translate into significant acceleration in SaaS and PaaS revenue in the second half of the year.”

Over the last five quarters, Oracle has grown the number of Paas and Saas customers to 1,350.

For the quarter, total revenues were $8.4bn, down 2%, which Oracle calculated as 9% lower due to the effects of currency. The company posted cloud plus on-premise software revenues of $6.5bn, down 2%, compared to the same period the year before. Cloud software as a service (SaaS) and platform as a service (PaaS) revenues were $451m, up 34%, while on-premise software revenues were $5.8bn, down 4%.

As Computer Weekly has previously reported, Oracle believes Saas and Paas will deliver substantial growth for the company in subscription licence revenue.

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