Oracle (ORCL) Cloud Selected by Xerox to Support New Ventures

Oracle ORCL recently announced that Xerox XRX has selected Oracle Cloud to support the launch of new businesses.

The move will see Xerox capitalizing on Oracle’s expertise in cloud solutions to bring 3D Printing infrastructure to manufacturing, structural health monitoring and augmented reality to improve customer support.

With the help of Oracle Cloud and Oracle NetSuite, Xerox will be able to create a unified cloud platform and operate with agility and speed. The move will enable Xerox to launch new business models and process them on a single platform without additional integrations.

Xerox collaborates with Deloitte and Infosys INFY to implement a wide range of Oracle Cloud Services to launch and monetize services quickly. The different cloud services offered by Oracle to Xerox include Oracle Fusion Cloud Enterprise Performance Management (EPM) for budgeting and financial planning, NetSuite for finance and accounting, Oracle Commerce for an online storefront, and Oracle Cloud Infrastructure (OCI) for a complete cloud infrastructure platform.

Oracle Corporation Price and Consensus

Oracle Corporation Price and Consensus

Oracle Corporation price-consensus-chart | Oracle Corporation Quote

Top Line Benefits From Cloud Momentum

Oracle has been gaining ground in its cloud business. Its software-as-a-service (SaaS), infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) solutions are likely to expand robustly over the next few years as enterprises increasingly transition to the cloud.

Oracle’s new cloud business offering holds promise as companies like MercadoLibre, Xactly, 8x8 and Zoom Video Communications have selected Oracle Cloud Infrastructure services to address business needs.

The company has been active on the acquisition front and chooses companies that can be easily integrated within its existing or new product lines. It acquires organizations with competing technologies with the aim of quelling competition. The NetSuite acquisition helped the company in rapidly penetrating the ERP and small & medium companies’ segment. Buyouts like Maxymiser and CloudMonkey aided Oracle in developing cloud-based software and testing tools & platforms for mobile apps.

The cloud services offering has opened up a new source of recurring revenues (subscriptions), which is expected to improve visibility. Oracle is anticipated to benefit from the ongoing trend of in-premise to cloud transitions leveraging its new technological developments.

Oracle’s strong Cloud Service Business Model accounted for 73% of total revenues in the second quarter of 2021, which increased 6% year over year (up 6% at cc) to $7.554 billion.

Oracle’s new venture with Xerox is a testament to the growing adoption of its cloud offerings among enterprises.

However, Oracle, a late entrant in the cloud services business, is playing catch-up with its biggest competitor, Microsoft MSFT.

Microsoft is riding on strong demand for its Azure cloud services. Azure’s increased availability in more than 60 regions globally is expected to have strengthened Microsoft’s competitive position in the cloud computing market.

Zacks Rank and Other Stock Performance

Oracle currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past year, Oracle’s shares have appreciated 39.6% outperforming the Computer and Technology sector’s rally of 12.5%. The Zacks Consensus Estimate for 2022 earnings has moved upward by 2.5% in the past 60 days to $ 4.77 per share.

Infosys carries a Zacks Rank #2 (Buy). Shares of the company have returned 40.8% in the past year. The Zacks Consensus Estimate for 2022 earnings has moved upward by 2.8% in the past 60 days to 71 cents per share.

Microsoft, which carries a Zacks Rank #2, is a better-ranked stock in the same sector.  Microsoft shares have appreciated 39.9% in the past year. The Zacks Consensus Estimate for 2022 earnings has risen by a penny in the past 60 days to $ 9.13 per share.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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