Larry Ellison, the chairman and chief technology officer of Oracle Corp. (ORCL, Financial), recently announced an expansion of the company's partnership with Microsoft Corp. (MSFT, Financial). This partnership aims to make it easier for Microsoft Azure customers to purchase and utilize the latest Oracle cloud database technology in combination with Microsoft Azure cloud services. The announcement was made during a conference call discussing Oracle's fiscal first-quarter 2024 earnings.
In addition to the partnership with Microsoft, Ellison mentioned all nine utility companies owned by Berkshire Hathaway Inc. (BRK.A, Financial) (BRK.B, Financial) are in the process of replacing their existing ERP systems and standardizing on Oracle's Fusion Cloud applications. This demonstrates the trust and confidence that Berkshire Hathaway has in Oracle's cloud solutions.
Oracle Cloud Infrastructure
Oracle Cloud Infrastructure is gaining momentum in the market due to its unique architecture and advanced features. Ellison, who is also a co-founder of the company, highlighted the advantages of OCI during a recent conference call. He emphasized that its second-generation data center and cloud platform have solved many problems that other cloud providers are still facing.
One of the key features of OCI is its non-blocking ultrafast RDMA network. This network not only benefits artificial intelligence training, but also enhances the performance of other applications, such as databases. Ellison mentioned that OCI's data centers are 100% automated, which reduces labor costs and eliminates human errors, leading to improved security.
Global reach and business-to-business solutions
The automation in OCI allows for the deployment of data centers in small countries, giving Oracle the potential to have more data centers than any other cloud provider. Ellison also highlighted the partnership with Nomura Research, which runs the Tokyo Stock Exchange on Oracle Cloud. This demonstrates the reliability and security of OCI, as it is trusted to handle critical financial operations.
In addition to its infrastructure capabilities, OCI offers advanced solutions for business-to-business e-commerce. Ellison explained that Oracle automates business-to-business transactions between its ERP cloud customers, including procurement, order management, financing, shipping and insurance. This comprehensive approach to business-to-business e-commerce sets Oracle apart from other cloud providers and simplifies business processes for its customers.
Impact of AI on OCI and future prospects
The conference call also addressed the impact of artificial intelligence on OCI. Ellison stated that AI is transforming various industries, including automotive, pharmaceuticals and communication. Oracle has seen significant growth in its AI cloud infrastructure business, with over $4 billion in AI training capacity contracts signed. OCI's RDMA interconnected Nvidia superclusters offer faster and more cost-effective AI model training compared to other clouds.
Furthermore, Oracle's cloud applications business is thriving, with major contracts expected in the health care sector. Cerner Health, a leading health care technology company, is set to award Oracle two large contracts worth over $1 billion. Additionally, as previousy mentioned, utility companies owned by Warren Buffett (Trades, Portfolio)'s conglomerate are replacing their existing ERP systems with Oracle's Fusion Cloud applications.
Profitability and growth of OCI
Regarding profitability, Ellison assured investors that OCI's AI supercomputers are not low-margin revenue. The cost-performance advantages of OCI, including faster training and inferencing speeds, allow Oracle to offer competitive prices while maintaining profitability. Ellison also mentioned the cost advantages of OCI's GPU training, which are often lower than other hyperscalers.
CEO Safra Catz expressed confidence in OCI's growth and momentum. She highlighted the strong demand for OCI and the need to continue building data centers to meet customer needs. Catz emphasized the focus on bringing customers to the cloud and expects continued growth in OCI's market share.
Exadata and Azure: A powerful partnership for cloud computing
In the rapidly evolving world of cloud computing, partnerships between major players are becoming increasingly important. One such partnership that has caught the attention of industry experts is the collaboration between Oracle's Exadata and Microsoft's Azure cloud platforms. This partnership brings together the strengths of both companies to provide customers with a powerful and comprehensive cloud computing solution.
Exadata, Oracle's flagship database platform, is known for its exceptional performance, scalability and reliability. It is designed to handle the most demanding workloads and deliver real-time analytics and insights. On the other hand, Azure, Microsoft's cloud computing platform, offers a wide range of services and tools for building, deploying and managing applications and services.
The collaboration allows customers to leverage the strengths of both platforms. By combining Exadata's powerful database capabilities with Azure's extensive cloud infrastructure, customers can benefit from enhanced performance, scalability and flexibility.
One of the key advantages of this partnership is the ability to seamlessly integrate Oracle databases with Azure services. Customers can easily migrate their existing Oracle workloads to Azure and take advantage of Azure's global network of data centers, which ensures low latency and high availability. This integration also allows customers to leverage Azure's advanced analytics and AI capabilities to gain valuable insights from their Oracle databases.
Cost savings and security features
Another significant benefit of the Exadata and Azure partnership is the cost savings it offers. By using Exadata on Azure, customers can optimize their infrastructure costs and reduce the total cost of ownership. Exadata's efficient hardware and software architecture, combined with Azure's flexible pricing models, enable customers to scale their database workloads according to their needs and pay only for the resources they use.
Furthermore, the partnership between Exadata and Azure provides customers with enhanced security and compliance features. Both platforms have robust security measures in place to protect sensitive data and ensure regulatory compliance. By leveraging the combined capabilities of Exadata and Azure, customers can have peace of mind knowing that their data is secure and their operations are compliant with industry standards.
Market acceptance of partnership
The Exadata and Azure partnership has already gained significant traction in the market. Many organizations, including utility companies owned by Berkshire Hathaway, have chosen to standardize on Oracle's Fusion Cloud applications running on Exadata and Azure. This demonstrates the trust and confidence that customers have in the combined capabilities of these two platforms.
Conclusion
Overall, Oracle's partnership and Ellison's upcoming trip to Microsoft headquarters signify the company's commitment to providing innovative and integrated cloud solutions. By leveraging the strengths of both companies, customers can expect enhanced capabilities, cost savings and improved efficiency in their cloud operations.
The collaboration between Exadata and Azure brings together the strengths of Oracle and Microsoft to deliver a powerful and comprehensive cloud computing solution. Customers can benefit from enhanced performance, scalability, flexibility, cost savings and security. As the demand for cloud computing continues to grow, partnerships like Exadata and Azure will play a crucial role in meeting the evolving needs of businesses worldwide.
