Oracle Chairman Believes Its Cloud Software Competes With AWS
Executive Chairman Larry Ellison argued on Tuesday that competing cloud software providers like Amazon Web Service, SAP, and Salesforce can’t compete with Oracle’s strategy.
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Oracle’s (NYSE: ORCL) stock price had a dip in after hours trading on Wednesday, following Executive Chairman Larry Ellison’s comments regarding bigger competitors in the cloud software development industry.
The infrastructure cloud “is a fundamental difference between Oracle and all of our application competitors,” Ellison said, while he continued to elaborate that competing against the likes of AWS (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT) and Google (NASDAQ: GOOGL) ultimately provides Oracle with the inspiration and necessity to differentiate its portfolio and provide broader business applications.
Ellison’s statements about competitors such as SAP and Salesforce being unable to keep up, came across as rather aggressive. This may explain the current lack of confidence among shareholders. It is also not always best company practice to badmouth the competition so blatantly.
If you’re wondering — “should I invest in Oracle?” — there may not be a straightforward answer to that question, so we’ll give you some facts that might help you understand Oracle’s share price movement.
There are some signs that the company may not be going in the right direction, such as its flat year-over-year revenue, less-than-average dividend yields (1.7%) and the fact it still keeps buying back much of its own shares to boost its earnings growth, which may be good for short-term investors, but is not a sustainable model for long-term growth.
When looking at this, Oracle does not appear to be a direct threat to the likes of Amazon when it comes to cloud computing. In terms of investment, Oracle may well be going steady for a long time, but it will not return large dividends for investors.
In the highly competitive SaaS market, there are 5 outliers who offer much more than Oracle.