Slow Cloud Computing Growth Pushes Oracle Profits Down 12%

Unable to cash in on the cloud computing growth and due to heavy discounts on its products, Oracle India’s profits saw a decline of 12 per cent in 2013-14 to Rs 297 crore.

Oracle’s rival SAP, which has been quite aggressive with its cloud push in the country on the other hand, said its cloud revenue in India is growing over 50 per cent y-o-y , while it posted a growth of 15 per cent in profit in the last fiscal. Microsoft, similarly, doubled its revenue to Rs 2,261 crore in the same period, on the back of growth in sales of its cloud-based software.

“Requirement for new databases, Oracle’s bread-and-butter business, is going down and so they are offering heavy discounts. So, while the top line maybe going up, it is happening at a smaller price and a smaller margin,” said Sanchit Gogia, chief analyst at Greyhound Research. ” Also, Oracle was initially pretty much dismissive of cloud, whereas SAP and Microsoft have been in recognition of cloud, way back in time.”

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