CEO highlights “Cloud Services became Oracle’s largest business… RPO [customer commits] was up 53% from last year to a record $99 billion.” Let’s break it down.

Oracle was seen as a legacy player in cloud, but its latest results demonstrate a shrewd strategy that quickly redefines its position.

Cloud growth is 21-25%

Oracle reported 21% YoY cloud revenue growth, reaching $5.6Bn in Q1FY25.

More tellingly, the company is guiding for 23-25% cloud growth next quarter – a signal of acceleration. But these numbers only tell part of the story.

Cloud Commits are up 80%

Oracle's Remaining Performance Obligations (RPO) – all signed contracts indicating future revenue – are up 53%.

The cloud portion of these commits is growing at an incredible >80%. Oracle’s CEO, Safra Catz, highlighted that even the seasonal dip in commits they saw in the previous 5 years didn’t occur this quarter.

“We signed several large deals this past quarter, resulting in a sequential increase in RPO compared to the decline that we typically see.”

Oracle’s cloud commits are now nearly 75% of all RPO, putting them at ~$74Bn.

This in the same ballpark as a top 3 cloud hyperscalers, Google Cloud, which had $78.8Bn in commits last quarter (AWS is at $156.6Bn).

Will we call them Big 4 soon?

But what’s behind this? A key driver is Oracle's multi-cloud partnerships.

It's a strategy that leverages Oracle's core strengths while expanding its reach.

By making its database technology available across all top clouds, Oracle is positioning itself as a critical infrastructure provider, regardless of where workloads ultimately reside.

Larry Ellison, Oracle's Chairman, bets big on it:

“Our recently signed AWS contract was a milestone in the MultiCloud Era. Soon customers will be able use the latest Oracle database technology from within every Hyperscaler's cloud.”

"We believe our cloud partnerships with AWS and Microsoft and Google will turbocharge the growth of our database business for years to come."

To achieve this, they had to overcome significant tech hurdles. Ellison revealed,

"We had to find a way to actually make the best versions of our database… available in other people's clouds. And what we're able to do is basically get OCI small enough that we could embed an OCI data center within Microsoft Azure or an OCI data center within Google or AWS...."

Demand proves the strategy works

"Demand is still outstripping supply," Catz admitted. It's an enviable position for any cloud provider. The company is literally doubling down on infrastructure investments, with plans to double CapEx in FY25.

Oracle's strategy is a lesson on how to leverage core strengths, embrace coopetition and focus on customer needs.