Oracle Plots Massive International Data Center Expansion
Published: February 14, 2018
The software company announced it will be building 12 cloud-based data centers around the world to better compete with the likes of Amazon, Microsoft and Google.
Oracle has announced plans to build out 12 new cloud-based data centers in a move that will pit the software titan squarely against cloud-infrastructure leaders Amazon, Google, and Microsoft. Oracle has announced plans to build six new data centers in Asia, located in China, India, Japan, Saudi Arabia, Singapore, and South Korea; two in Europe, to be in Amsterdam and Switzerland; two in Canada; and two in the United States. This is one of the largest infrastructure projects Oracle has ever undertaken, and will quadruple the company’s current total of three cloud data centers.
Oracle, which still makes most of its sales and earnings from software databases, hardware and recurring revenue from software and product licenses, has spent the past few years building up its arsenal in the cloud. The company offers a slate of cloud-based applications including tools for analytics, management and software-as-a-service, or SaaS. When Oracle reported its most recent quarterly results, in December 2017, the company said its total cloud revenue rose 44 percent from the prior year, to $1.52 billion. That amount made up 16 percent of Oracle’s overall quarterly sales of $9.62 billion. Despite this, in terms of the actual data centers, Oracle is still lagging behind.
Amazon, with its Amazon Web Services, remains the industry leader by a large margin, followed by Microsoft. Because companies like Amazon, Google, and Microsoft are already at scale, getting clients to shift to Oracle will pose some challenges. In addition, as data centers and the necessary equipment can come with astronomical building costs, Oracle will have to increases its capital expenses to catch up to other industry leaders.