Credit Suisse Says Oracle Can Reaccelerate Growth into Double-Digits

Credit Suisse Says Oracle (ORCL) Can Reaccelerate Growth into Double-Digits

By Sam Boughedda

In a research report by Credit Suisse analysts on Tuesday, the firm said Oracle (NYSE:ORCL) can reaccelerate revenue growth into the double digits.

The report, led by Phil Winslow, stated that as they transition to the cloud accelerates, Oracle holds a key underappreciated advantage - the company’s sizable entrenched on-premises installed base.

“Although Oracle began its transition to the cloud after AWS (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and Google (NASDAQ:GOOGL) — and had some false starts along the way — we believe Oracle has reached an inflection point in terms of migrating its large on-premises Oracle Database installed base, which is supported by a significant application developer and enterprise DBA ecosystem, to Oracle Cloud,” wrote the analysts. “We therefore believe that Oracle is well-positioned to emerge as the #3 or #4 vendor in the PaaS/IaaS market and as the #2 vendor in the SaaS market — enabling the company to continue to reaccelerate revenue growth into the double digits.”

Focusing on the “underappreciated advantage,” Credit Suisse said they believe Oracle Cloud is uniquely positioned to reduce the total cost of ownership of Oracle Database workloads that cannot be replicated by other IaaS vendors.

“Specifically, Oracle can influence 'down the stack' to the infrastructure layer but competing cloud IaaS providers cannot dictate 'up the stack' into Oracle’s proprietary platform layer.”

“We expect this 'down-the-stack' strategy to enable Oracle to (1) retain its existing database customers by lifting-and-shifting current workloads to the cloud and (2) upsell new capabilities within Oracle Cloud—increasing Oracle's wallet share of the enterprise IT budget while also reducing its customers’ overall spending as compared to other cloud IaaS vendors.”