What’s Going On Here?Oracle is helping businesses clean house and make a fresh start: the US software company reported stronger-than-expected quarterly earnings late last week. What Does This Mean?It’s no secret that the cloud computing industry is big and getting bigger, but Oracle hasn’t benefited from its pandemic-driven growth this year as much as, say, Amazon and Microsoft have. The company’s would-be customers, after all, reprioritized their spending plans back in the spring and ultimately decided not to splash out on upgrading their software. And Oracle – in name and nature – found itself warning that there’d be tough times ahead.
Now, though, there’s light at the end of the tunnel, which might be why Oracle’s services were at the top of its customers’ shopping lists last quarter. The software giant delivered higher sales and profit than analysts predicted after having previously lowered those expectations, and it increased its earnings forecast for this quarter too. Why Should I Care?For markets: Disposable products.
Oracle’s shares initially climbed 2% on Friday, taking this year’s rise to 14%. But while that’s roughly the same as the overall US stock market, it’s miles behind cloud rivals Amazon and Microsoft, whose shares are up 67% and 33% respectively. And Oracle may never catch up: it’s admitted that its customers don’t see its services as an essential expense in a pandemic, which could mean they’re the first to get the chop if things go south again.
Zooming out: A buffering rivalry.
One cloud service that has proved itself essential during the pandemic is video-streaming. Just look at Disney, which announced last week that Netflix-rival Disney+ now has 87 million subscribers, and could have as many as 260 million by 2024 (tweet this). That – along with new content announcements – seemed to press all the right buttons with investors, and they sent its stock to an all-time high. | 