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Cloud Stocks: A Look at Oracle’s 2018 M&A Activity

Posted on Friday, Mar 29th 2019

Earlier this month, Oracle (NYSE: ORCL) announced its third quarter results. The company outpaced market expectations for the quarter but the slowdown in its revenue growth is worrying. Despite the slowdown, Oracle is close to its 52-week high.  

Oracle’s Financials

Revenue for the third quarter declined 1% over the year to $9.6 billion. Net income increased to $2.7 billion or $0.76 per share and non-GAAP net income was $3.2 billion or $0.87 per share. Analysts were expecting earnings of $0.84 per share on revenues of $9.59 billion.

Cloud Services and License Support revenue was up 1% to $6.7 billion, while Cloud License and On-Premise License revenue was down 4% to $1.3 billion. Hardware revenue was down 8% to $915 million and services revenue was down 1% to $786 million.

Oracle ended the quarter with a cash balance of $14.72 billion.

For the current quarter, total revenues are expected to be flat to down 2% and EPS is expected to be $1.05 to $1.09. Analysts were expecting EPS of $1.05 and a 1% decline in revenue.

Oracle’s Platform Strategy

In October, Oracle launched a Digital Assistant, which is built on the Oracle Cloud Infrastructure. The Oracle Digital Assistant platform helps in building and deploying AI-enhanced digital assistants that help end users when using Oracle applications. It supports no-code development with a web-based, drag-and-drop interface that allows business subject matter experts to build and train digital assistants using visual and declarative tools without the need for specialized development or AI skills.

Last year, Oracle announced the availability of several platform services with built in automation to lower cost, reduce risk, accelerate innovation, and get predictive insights for organizations. These offerings included Oracle Autonomous Data Warehouse Cloud, Oracle Autonomous Analytics Cloud, Oracle Autonomous Integration Cloud, and Oracle Autonomous Visual Builder.

It also followed it up with a new generation of autonomous platform-as-a-service (PaaS) offerings for its Mobile Cloud Enterprise, Data Integration Platform Cloud, Developer Cloud, and API Platform Cloud. These offer self-learning chatbots and automatic Q&A chatbots designed to pull insights from unstructured data.

Last week, Oracle made available an enterprise-grade blockchain platform as part of Everledger’s blockchain-based platform, which is trusted by high-value industries such as diamonds, colored gemstones, fine wine, and art.

Oracle Cloud Platform is a comprehensive, standards-based combination of Oracle and open source technologies to build, deploy, integrate, secure and manage enterprise applications. It is also optimized for hybrid and multi-cloud environments. Oracle Cloud Platform is also available as a subscription-based or a PaaS offering. Oracle Cloud Platform supports numerous open standards such as SQL, HTML5, and REST, open-source solutions such as Kubernetes, Hadoop, and Kafka and a wide variety of programming languages, databases, and integration frameworks.

Oracle’s 2018 Acquisitions

In November, Oracle acquired SD WAN vendor Talari Networks for an undisclosed sum. San Jose-based Talari was founded in 2009 and had raised $53.5 million in funding. Talari’s SD-WAN is used by more than 500 customers in more than 40 countries. The addition of Talari’s technology is expected to complement Oracle’s session border controller (SBC) and network management infrastructure. Its annual revenue is estimated to be $15.8 million. It competed with Aryaka Networks, VeloCloud, and Ecessa Corporation.

In October, Oracle acquired company intelligence platform DataFox for an undisclosed amount. San Francisco-based DataFox was founded in 2013 and had raised $11.8 million in funding. It is expected to enhance Oracle Cloud Applications with an extensive set of AI-derived company-level data and signals. Its annual revenue is estimated to be $6 million. It competed with InsideView, PitchBook Data, and Owler.

In October, Oracle acquired health tech startup goBalto for an undisclosed sum to expand its Health Sciences business unit. goBalto’s study startup services are used at over 90,000 research sites across more than 2,000 studies in over 80 countries, delivering a 30 % reduction in study startup cycle times. San Francisco-based goBalto was founded in 2008 and had raised $37.6 million in funding. Its annual revenue is estimated to be $8 million. It competed with DataTrak Int, TrialScope, and Sylogent.

In September, Oracle acquired Iridize, a leading enterprise cloud platform for employee training and onboarding, for an undisclosed sum. Iridize’s technology was expected to enhance Oracle’s Guided Learning capabilities to increase cloud application adoption and improve the user onboarding experience. Tel Aviv-based Iridize was founded in 2010 and was bootstrapped. Its annual revenue is estimated to be $2.9 million. It competed with WalkMe, Whatfix, and Toonimo.

In May, Oracle acquired machine learning platform DataScience for an undisclosed sum. Oracle expects to offer a single data science platform that will leverage Oracle Cloud Infrastructure service and its SaaS and Paas tools. Culver City-based DataScience was founded in 2014 and has raised $28 million in funding. Its annual revenue is estimated to be $7.8 million. It competed with DataRobot, Dataiku, and Civis Analytics.

In April, Oracle acquired contextual intelligence platform Grapeshot for $400 million to complement Oracle Data Cloud. Grapeshot developed a platform to help ensure “brand safety”. New York-based Vocado was founded in 2006 and had raised $22.4 million in funding. Its annual revenue is estimated to be $35 million. It competed with Peer39, ADmantX, and Integral Development.

In April, Oracle acquired student-centric, cloud-based financial aid solution Vocado for an undisclosed sum. Vocado would be added to Oracle Student Cloud, Oracle’s cloud-based SIS. Los Angeles-based Vocado was founded in 2008 and was bootstrapped. Its annual revenue is estimated to be $4 million. It competed with Regent Education, Education Partners, and CampusLogic.

In April, Oracle acquired SparklineData to augment Oracle PaaS services for enterprise customers transitioning to Big Data solutions. SparklineData had developed SNAP, an Apache Spark native business intelligence platform for complex datasets with sub-second query response times that can be deployed over enterprise data warehouses, data lakes, and IoT analytics. SparklineData’s employees joined the Oracle Big Data Cloud organization and Oracle is expected to roll out a new release of SNAP on the Oracle Cloud in 2019. San-Francisco-based SparklineData was founded in 2014 and was bootstrapped. Terms of the deal were not disclosed

In February, Oracle acquired cloud-based, artificial intelligence-driven cyber security solution Zenedge for an undisclosed sum. Miami-based Zenedge was founded in 2017 and had raised $13.7 million in funding. Its annual revenue was estimated to be $5.1 million and it competed with Cloudflare, Sucuri, and Sharktech. The Zenedge Cybersecurity Suite is now Oracle Dyn Web Application Security, and part of the Dyn GBU secure, intelligent edge services portfolio.

We recently covered Saleforce’s thriving PaaS strategy that has helped developers and entrepreneurs build on ideas to create sustainable high-value businesses. What can Oracle do to up its PaaS game? Oracle’s platform and acquisition strategies show a leaning toward data analytics and AI startups. What other startups could Oracle acquire to reinvigorate its cloud strategy?

Last week, Oracle also disclosed its plans to cut 352 jobs in an attempt to restructure its business and rationalize the workforce to emphasize on cloud-related products. Its stock is currently trading at $53.19 with a market capitalization of $181.7 billion. It hit a 52-week low of $42.40 in December and touched a 52-week high of $54.38 last week.

Photo Credit: May Wong/Flickr.com

This segment is a part in the series : Cloud Stocks


. Smartsheet Acquiring Bootstrapped Startups to Drive Growth
. Bootstrapped Unicorn Atlassian is Acquiring Capital Efficient Startups
. Netflix Price Hike Ruffles Competition
. How Will Carbon Black Differentiate?
. ServiceNow Grows Through Addition of Capital-Efficient Startups
. Zendesk and Freshworks Follow Different Acquisition Strategies
. Tableau Grows Through Small Acquisitions
. Open Platform Strategy Stands Intuit in Good Stead
. Will GoDaddy Follow the PaaS Route?
. Adobe Delivers Via PaaS
. A Look at Oracle’s 2018 M&A Activity
. What Apps Will Drive More Traction for Cloudera?
. Slack's App Focus Will Be Key to Post-IPO Success
. IBM Counts on its Cloud and Platform for the Turnaround
. Atlassian Acquires From its PaaS Marketplace
. What Should SAP Acquire to Triple its Value by 2023?
. Expect ServiceNow to Acquire From App Marketplace
. Should Alarm.com Follow a PaaS Strategy?
. How Upwork Can Leverage the Virtual Company Trend
. Qualys Scouting For Acquisitions
. Should SAP Acquire Zendesk or Freshworks?
. HubSpot Counts on its API Strategy
. SurveyMonkey Eyes Acquisitions for Growth
. Workday Wants to Disrupt Cloud Computing Using Machine Learning
. Einstein and Open-Source Platform Lead the Charge for Salesforce
. DocuSign Prepares to Beat Rival Adobe
. Veeva Soars, But Dassault Acquires Medidata for $5.8 Billion
. Tableau Acquisition Signals Massive Analytics Push for Salesforce
. Oracle Joins Hands with Microsoft to Take on Amazon
. GoDaddy is Making Strategic Acquisitions for the Next Level of Growth
. Alteryx Sees Strong Momentum
. Adobe Leveraging Magento and Marketo to Deliver Blockbuster Performance
. Is Slack Overvalued?
. How Will Cloudera Address the Competition?
. Zoom is Not Bothered by Cisco or Microsoft
. Domo Counts on Enterprise Revenue for Growth
. Netflix Plays with Pricing and Games to Attract Subscribers
. CrowdStrike Has a Successful IPO
. Atlassian Crosses the Billion Dollar Revenue Milestone
. ServiceNow Believes Strength Lies in Tie-ups
. Partnerships are the Mantra for BlackLine
. SurveyMonkey Counts on Enterprise Segment for Growth
. HubSpot Soars to a New High
. Intuit Pushes AI to Simplify Tax Filing
. Splunk Sees Strong Cloud Momentum
. Forescout Partners with Big Names
. Smartsheet Tapping into the Government Sector
. Salesforce Continues its Shopping Spree
. Palo Alto Networks Targets the IoT Security Market
. DocuSign Focuses on the Mortgage Sector
. Oracle Brags About Autonomous Database
. Blackbaud Acquires YourCause to Grow Addressable Market
. The Market Expects a Lot More from Adobe
. Anaplan Makes its First Acquisition Post IPO
. Activist Investor Drives Market Interest in Box
. MongoDB's Formula for Success
. Coupa Aims for $1B Revenue
. Dropbox on a Rocky Road
. Medallia Banks on Acquisitions
. IBM Banks on AI
. Time For Skepticism with Netflix
. SAP Riding High on the Cloud
. Amazon's Faster Shipping Hurting its Earnings
. ServiceNow CEO Change Signals Focus on Acquisitions
. Will Google Acquire Fitbit?
. HubSpot Focuses on Its Platform
. BlackLine Partners with Google Cloud
. Rapid7’s Focus on Cloud SIEM Pays Off
. Splunk Bets Big on Data Streaming
. Intuit's QBO Scores Big
. VMware Builds Up With Acquisitions
. Palo Alto Targets $5B Revenue by 2022
. Workday Targeting Procure-to-Pay Cycle
. Will Salesforce Acquire DocuSign?
. Okta Targets Enterprise Customers
. MongoDB Eyeing China With Alibaba Partnership
. Twilio Counts on API Upgrades for Growth
. Adobe Revs up its Experience Platform
. Top 20 for 2020
. Anaplan Sees Expanding Use Cases
. Dropbox Gears Up to Regain Lost Valuation
. Forescout Fails to Deliver
. Enterprise Bet Pays Off for SurveyMonkey
. SAP Bets Big on Experience Management
. Twilio Steps up Investment in 2020 to Preserve Growth Momentum
. Zendesk, Freshworks Focus on Marketplaces and Integrations
. Proofpoint Targets Insider Threats Through Acquisition
. RingCentral's Powerful Partner Strategy Would Augment with PaaS
. Qualys Counts on Google and Microsoft for Growth
. Shopify Soars on Improved Merchant Offerings
. HubSpot Believes in the Importance of PaaS
. BlackLine Remains Focused on SAP Integration
. Recently Public Cloudflare has New Edge
. GoDaddy is on a Shopping Spree
. Intuit Targets Online User Base Through Acquisition
. Should Palo Alto Networks Acquire ZScaler?
. Why Salesforce Buying Vlocity Proves the Growing Importance of PaaS
. Datadog Performing Well Post Recent IPO
. Workday Should Open Up About its PaaS Success
. Anaplan Focuses on API Connectors for its Platform
. Veeva
. Five9 Strengthens its PaaS Focus
. RealPage Brings AI and SaaS to Real Estate
. Splunk Should Open up About its PaaS Metrics
. Okta Benefiting from App Diversity
. Oracle Sees Growth Momentum
. Xero Focuses on a PaaS Strategy
. DocuSign Resilient to COVID-19
. Smartsheet Looking up to Enterprise Customers for Growth
. Paylocity Delivers Solid Results
. Q2 Holdings Expands TAM with Acquisitions
. New Relic Focuses on PaaS
. AppFolio Leverages AI for Product Enhancement
. Will Adobe Open Up About its PaaS Statistics?
. Change Healthcare Pushes APIs
. Dropbox Needs to Share API Metrics
. Upwork Improves Monetization
. MongoDB has Miles to go
. Nutanix Needs to Define a PaaS Strategy
. Cloudera Focuses on Hybrid Cloud
. Atlassian Gears Up for Growth, Unfazed by Covid-19
. Shopify Helps Merchants Pivot to Online Stores
. ServiceNow Steady in Turbulent Seas
. RingCentral Sees Strong Traction
. Twilio Hits 52-Week High Amidst COVID Crisis
. HubSpot Lowers Outlook Amidst Virus Concerns
. Proofpoint Acquiring Even Amidst Crisis
. BlackLine Looks Solid At The Face of Covid-19
. GoDaddy Continues to Acquire
. Qualys Expands Cloud Offerings to Soar to New Highs
. Zendesk Struggling Amidst the Downturn
. Alteryx Bounces Back Despite Low Outlook
. Palo Alto Networks Continues to Acquire
. Workday Extends its PaaS Strategy
. Splunk Rides High on Cloud Initiatives
. Salesforce Partners with Workday to Address the New Normal
. Veeva Scales New Highs
. Is Smartsheet’s Pullback a Buying Opportunity?
. MongoDB Soars Even in the Crisis
. Okta Reiterates Outlook
. Is Anaplan a Prospect for Oracle, SAP?
. Oracle Relies on Autonomous Offerings
. Adobe Shifts its Focus
. Paycom Confident Under Current Conditions
. DocuSign Soars to Record Highs
. Paylocity Acquires Amid Crisis
. Datadog's Integrations and Upgrades Help it Soar
. AppFolio Improves Offerings for Current Conditions
. SurveyMonkey Should Get Into PaaS
. Model N Soars to a Record High
. Appian Focuses on RPA for Growth
. Slack Beefs up its Portfolio
. Coupa Expands into Treasury Services
. CrowdStrike Soars to Record Highs
. Guidewire Expands Cloud Offerings
. Dropbox Should Focus on PaaS
. Talend Expands Data Offering Through Partners
. IBM Expands Cloud Partners
. One Medical Supports COVID-19 Care Digitally
. Microsoft Rides High on Teams and Gaming
. Investors Say Yes to nCino’s IPO
. Nutanix Focuses on Government and Media Verticals
. SAP Rethinks Qualtrics Acquisition
. Tenable Expands Into Industrial Cyber-Security
. ServiceNow Expands Ties with Zoom
. Cloudera Powers its Data Platform with Partnerships
. Atlassian Continues to Acquire from PaaS Ecosystem
. Shopify Soars to an All-Time High
. The PaaS Landscape
. HubSpot Focuses on the Enterprise Segment
. GoDaddy Restructures During COVID
. Akamai's Security Solutions Thriving
. Blackline Needs a PaaS Strategy
. Twilio - A Successful PaaS Story
. Zendesk Invests in the Future
. Qualys Continues to Acquire Indian Startups
. ZoomInfo Lists Despite COVID-19
. Analysis of Alteryx PaaS Strategy
. Fastly Needs to Diversify from TikTok
. Way to Go, Salesforce
. Intuit Continues to Acquire
. VMware Continues Buying Spree
. Analysis of Five9's PaaS Strategy
. Okta Expands Alliances to Attract Enterprises
. Palo Alto Continues to Acquire
. Analysis of Splunk's PaaS Strategy
. BigCommerce Goes Big with IPO
. Analysis of Workday's PaaS Strategy
. Analysis of Anaplan's PaaS Strategy
. Bill.com Sees Strong Demand
. Analysis of MongoDB's PaaS Strategy
. Analysis of Wix's Platform Strategy
. New Relic Product Upgrades Deliver Growth
. What Should Proofpoint Acquire?
. Smartsheet Should Follow Atlassian’s Example
. Adobe's Relentless Growth Continues
. SurveyMonkey's PaaS Prospects
. DocuSign Acquires Amid COVID
. Paylocity Counts on Video
. The Unstoppable Veeva
. Magic Software Acquires to Expand in Europe
. What Can Cloud Startups Do To Raise Seed Capital in 2021?
. Guardant Seeks to Disrupt Oncology Testing
. Dropbox Adds Security Capabilities
. Domo Growing Steadily
. Nutanix Focuses on the Hybrid Cloud
. IBM Fails to Impress

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