Oracle will be ‘data broker’ for the wider AI future, says analyst

Oracle (ORCL) shares are rising after the company reported better-than-expected first-quarter results and announced partnerships with tech giants Amazon (AMZN) and Google (GOOG, GOOGL). Patrick Moorhead, founder, CEO and principal analyst at Moor Insights & Strategy, joins Asking for a Trend to examine the results and discuss how the company can benefit from the AI ​​race.

Moorhead says Oracle is “on a roll” and that the partnership with Amazon Web Services (AWS) is significant because “these two companies have basically been at war with each other since AWS was founded 15 years ago.” Combined with the partnership with Google, he explains that “Oracle's database is very much alive and well and their enterprise customers are demanding it.”

He believes the jump in price is justified, arguing: “For 10 or 15 years, there has been a stalemate between Oracle and these classic cloud providers. And they see that the enterprises want Oracle. They're not going to just give up their Oracle database and move to a cloud database.” He points out that Oracle is the only company that focuses exclusively on commercial customers, while other names like Amazon serve both commercial and consumer customers.

“Oracle has been particularly strong in the largest corporate governments that require the most security-critical environments and are very heavily regulated,” he adds. Moorhead highlights three facets of cloud businesses for the company: its Oracle Cloud Infrastructure (OCI), the software as a service (SaaS) segment and its commercial business. “In terms of scale, they're doing pretty well,” he says.

As AI becomes more prevalent, data will be the company's biggest game, according to Moorhead. He explains, “The biggest obstacle for companies that are doing deep AI is the data problem. It's about getting the right data. It's about blending the right data to give generative AI the right solutions without giving away sensitive information. And for the customers I've talked about, Oracle is the place to go. So they're going to be the data broker for the generative AI era.”

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This article was written by Melanie Riehl