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Oracle’s Ellison: Company’s Autonomous Database Stands to Significantly Lift its Cloud Business

The machine learning-based Autonomous Database that Oracle introduced at its OpenWorld conference in October in San Francisco stands to significantly lift the company’s cloud technology business, according Larry Ellison, Oracle chairman and CTO.

Oracle’s largest businesses today are technology and applications, he pointed out Nov. 15 at the company’s annual stockholders meeting in Redwood City, Calif. At the core of its technology business is a database that can be delivered on-premise for data centers that customers own or via the public cloud, “where we compete” with Amazon Web Services, he noted.

The company’s on-premise technology business is still a larger part of its business than the cloud technology part of its business, he conceded. But he said: “We have aggressively begun the transition to the cloud.” And the Autonomous Database stands to help Oracle transition its technology business further to the cloud, according to Ellison.

Oracle’s application business for on-premise usage, meanwhile, is “getting smaller” because the company’s newer business in which it delivers applications via the public cloud is “growing very, very, very rapidly,” he said. The transition from on-premise application delivery to the cloud application business was started by Oracle a while ago and the cloud application business is now “much bigger” than the on-premise application business, he said.

“We expect the bulk of our business going forward and the bulk of our growth will be driven by our public cloud business,” he went on to say. Oracle’s application business has been growing and its Software-as-a-Service (SaaS) business “has been growing in excess of 50 percent,” he told shareholders. The company’s total application business will increase “while we scale the business,” he said.

“These are early days” of Oracle moving its technology business to the cloud, and “we don’t expect that our technology business on-premise will decline” as the transition continues, but instead remain “flattish,” he said.

Oracle’s consulting business is growing, “driven by demand in the cloud,” Ellison also told shareholders. But its hardware business is declining because people are spending less money now to install hardware for their on-premise data centers as more of them shift their data storage to the cloud.

The company’s new autonomous database is a “totally automated self-driving system that does not require a human being either to manage the database or tune the database,” Ellison told analysts Sept. 14 in an earnings call for Oracle’s first quarter (ended Aug.31). He added that using artificial intelligence (AI) “to eliminate most sources of human error enables Oracle to deliver unprecedented reliability in the cloud.”

Several companies, including Google, have all invested heavily in AI, just like Oracle. But one huge differentiating factor that separates Oracle from its AI rivals is that it’s the only with its own true database, Ellison said during a financial analyst meeting that was webcast from OpenWorld Oct. 5.