Oracle Cloud

Those are, like, old school businesses.

What I'm more interested about is their OCI business, which is called their Oracle Cloud Infrastructure.

So OCI is Oracle's cloud business, similar to Amazon Web Services or Google Cloud.

It allows companies to basically rent, you know, computing power, storage, networking, GPUs, instead of building it, uh, like infrastructure themselves, because it is, it is extremely hard to build out those type of components if you don't really have a whole lot of experience or the, the money behind you and, and you know, Oracle's been in the business for a really long time.

So this is extremely important because AI training, as we know, and running these, uh, like these huge models takes enormous amount of like computing power.

They've got a hardware business by comparison is small and their services business also uh smaller here but their cloud applications grew 10 percent to 4.2 billion dollars um within that fusion did well 14 industry apps like oracle health up 12 percent uh net suite up just six percent but whatever um because that cloud growth is just accelerating 62 year-over-year growth in their overall cloud business breaking away from all the other growth rates that they've seen that are so positive with the exception of software support um but what we see is Hardware picking up, services doing fine, but that cloud business, the biggest business they've got getting bigger and bigger, specifically within that cloud infrastructure.

The building of data centers, OCI, Oracle Cloud Infrastructure, up 112% on a year-over-year basis to $7.4 billion, nine quarters in a row of the growth rate accelerating here.

Now, they added a lot of data center capacity.

They measure these things in terms of how much power it uses, and it was 850 megawatts of power added just in this quarter.

So it's both an obligation as well as an asset, an asset that they can rent out.

So if you look at the money they've spent on CapEx and property, plant, and equipment, and then also look at the money they're spending on these leases, you end up with sort of what they paid for these assets.

Then if you look at the revenue from OCI and multiply it by an annual revenue run rate, About 18% is coming back in revenues, even right now, even as they're massively in this build moment for Oracle.

I think it shows you that The company is already seeing returns from their asset allocation.

Andy, would you say follow my leader from that point?

Well, I w- I would say with all the data flowing through the Oracle Cloud, there should be another pickup of AI that if anytime Lisa or anyone on the commentary team says soldier's course-

Right

... that should automatically move one of the leeward marks further-

Speaking of cloud stuff, AWS is now reaching out to touch Azure.

On August 31st, AWS announced that its customers can now provision high-speed private connectivity to Microsoft Azure environments on demand using AWS Interconnect multi-cloud, which already supports connecting to Google Cloud and Oracle Cloud.

So Azure was the last shoe to drop, so to speak.

Azure connectivity is in public preview now, but will result in customers getting simplified on-demand networking, according to AWS.

Okay.

And moving right along, on September 2nd, HPE announced an expanded collaboration with Oracle centered on Oracle's global AI infrastructure.

Oracle already uses lots of HPE's Juniper networking, routing, and switching platforms in its Oracle Cloud Infrastructure data centers and edge networks.

As Oracle Cloud Infrastructure expands its AI superclusters, Oracle intends to expand HPE's footprint in the network with the potential, potential, not guaranteed, multi-year deployment of HPE Juniper networking PTX and MX routing platforms and QFX and EX switching platforms, along with multi-year networking support services.