Buoyed by cloud sales, the software giant’s numbers are good, but some dispute the AI-driven nature of the company’s gains. Credit: IDG-Owned Oracle’s latest financial report boasts substantial increases in revenue, net income, and earnings per share, largely thanks to cloud sales, which the company was quick to credit to the rise of AI. The report for Q3 of fiscal 2024, released yesterday, said that Oracle had signed multiple large-scale cloud infrastructure contracts in the previous three months, with no end in sight, as CEO Safra Catz touted the company’s bright prospects in cloud. “We expect to continue receiving large contracts reserving cloud infrastructure capacity because the demand for our Gen2 AI infrastructure substantially exceeds supply,” she said, in a statement. “Despite the fact that we are opening new and expanding existing cloud data centers very, very rapidly.” In the past year, the company has expanded its cloud footprint considerably, announcing plans to enhance its Middle East cloud region, as well as in Africa and in Mexico, and was the first vendor to open a cloud region in Serbia and in Colombia, among other global cloud expansion plans. The company, which previously highlighted Oracle Cloud Infrastructure (OCI) demand for AI workloads as a chief driver of financial gains a year ago, said OCI, autonomous database, and strategic cloud applications pushed service license and support revenue up 11%, to $10 billion, for Q3 2024, while applications subscription revenues also rose by double digits, by 10% to $4.6 billion. Part of the move to Oracle’s Gen2 cloud infrastructure can be explained by the transitioning of many of the company’s Cerner health sciences customers to that platform, chairman and CTO Larry Ellison said. “In Q4, Oracle will start delivering its completely new Ambulatory Clinic Cloud Application Suite to these same customers,” he noted. That’s an important step forward, said Ellison, because the costs of running OCI are considerably lower than those of running the dedicated Cerner data center, and applications can be updated more regularly, along Oracle’s usual three-month schedule. It’s unquestionably an encouraging quarterly report for Oracle, whose partnerships with Nvidia, Microsoft, and other hyperscalers create an understandable momentum in the company’s infrastructure service, according to Eric Newmark, IDC group vice president. But, Newmark said, it’s difficult to square Oracle’s hyping up of its AI credentials from the reality. “No doubt that AI is driving increased demand for cloud, but I’m still unclear as to why AI is a strategic advantage for them versus other vendors,” he said. “I’ve been asking them for a year about how AI will drive revenue growth for them and they’ve provided no concrete answers. They also don’t yet have any direct pricing strategy around how to monetize AI.” Related content feature New US CIO appointments, May 2024 Congratulations to these 'movers and shakers' recently hired or promoted into a new chief information officer, senior IT, or board role. By Martha Heller May 08, 2024 9 mins CIO Careers IT Leadership feature The extent Automic’s group CIO goes to reconcile data Cathy O'Sullivan, CIO editor-in-chief for APAC, recently sat with Marcelo Dantas, group CIO at Automic Group, to discuss completing one of the largest-ever registry services transitions in Australia, keeping pace with technology, and why cyberse By CIO staff May 08, 2024 9 mins CIO Cloud Native Data Quality feature Expion Health revamps its RFP process with AI The healthcare cost management firm built a customized AI tool to streamline an error-prone process for gaining new customers. Now, it’s considering selling the project for external use. By Grant Gross May 08, 2024 6 mins CIO 100 Healthcare Industry Digital Transformation feature Ways IT leaders can meet the EU AI Act head on The biggest mistake companies of all sizes could make is to put conformity before innovation, according to EU AI Act co-rapporteur Dragoș Tudorache. By Andrada Fiscutean May 08, 2024 6 mins CIO Military Regulation PODCASTS VIDEOS RESOURCES EVENTS SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe