Oracle's Customer Experience Cloud Suite Expands Offerings

Oracle Corporation ORCL is slowly and steadily expanding its foothold in the cloud and enterprise Artificial Intelligence (AI) market. The company recently unveiled new additions to Oracle Customer Experience (“CX”) Cloud Suite namely Oracle Infinity and Oracle CX Audience. It also launched Oracle Loyalty.

The launch will integrate the disparate data silos within an enterprise, which will eventually lead to effective, consistent as well as quick inferences. The connected experiences will reinforce the customer’s brand loyalty and aid it in realizing its business goals.

Product highlights

Oracle Infinity

Oracle Infinity enables marketers to customize marketing experience by furnishing marketers with effective insights on customer interaction. The insights obtained via unified behavioral data when distributed to the “Broader Business User Community” will ensure effective marketing performance.

The new platform will also efficiently manage and integrate complex large data sets of enterprises. These initiatives will boost customer engagement across all the channels which will ultimately provide a boost to its top-line.

Oracle CX Audience

Oracle CX Audience will capture, manage, integrate and enhance enterprise data such that they gain actionable insights. Innovative audience segments will aid the marketers to reduce the time answering queries and consequently focus on engaging customers. The marketers will be able to determine campaign level performance and evaluate future mix of segments.

The number of companies leveraging AI is increasing. The companies want to utilize AI to render specific solutions and enhance solutions’ capabilities. The new additions to the portfolio are likely to bode well for the company’s cloud suite.

Per a recent report of ResearchandMarkets, the global enterprise AI market will reach $6.14 billion by 2022, from $0.845 million evaluation in 2017 at a CAGR of a whopping 48.7%. Strong adoption of AI will strengthen the new initiatives of Oracle CX Cloud Suite.

Oracle Loyalty

Oracle Loyalty aids organizations to furnish loyalty programs, to ensure high retention rates. Per a company’s report, it costs an enterprise 7X more to win a new customer. Further, increasing retention rate by 5%, translates into a surge in profits by 95%. The report strengthens the prospects of this new initiative.

Updates

The company further announced various innovations to its Oracle CX Cloud Suite aimed at providing enterprises with effective “marketing, sales, commerce, and customer service” strategies.

Per a Forrester report, as revealed by the company’s press release, 30% of companies will witness a declining CX performance in 2018. This decline will represent “a net loss of a point of growth.” Oracle CX Cloud Suite identifies this crisis.

Oracle CX Cloud Suite helps customers reduce IT complexity, deliver innovative customer experiences, and achieve predictable & tangible business results. The new updates will ensure time-to-time up-gradation of the seamless and consistent end user experience.

Oracle CX Cloud suite was recently selected by Fanatics to enhance its business. We believe Oracle’s new marketing solutions will enhance its analytics portfolio. The company is well poised to benefit from its growing presence in the rapidly increasing AI market.

Bottom Line

Oracle is gaining ground in its cloud business as evident from its third-quarter fiscal 2018 performance, which benefited from the ongoing cloud-based momentum. Total cloud revenues (16% of total revenue compared with 13% in the year-ago quarter) advanced 32% to $1.57 billion.

Oracle Corporation Revenue (TTM)

Oracle Corporation Revenue (TTM) | Oracle Corporation Quote

Moreover, total cloud and on-premise software revenues increased 8% to $7.98 billion. We believe that the company’s growing cloud market share will continue to drive top-line growth in the foreseeable future.

Going forward, partnerships with Salesforce, Microsoft MSFT and NetSuite along with the recent acquisition of TOA Technologies will provide a significant boost to Oracle’s cloud-computing endeavors.

However, management provided soft outlook for the cloud business, which will remain an overhang on the shares in the near term. Further, higher investments on Infrastructure as a Service ("IaaS") platform will affect gross margin expansion in the near term.

Zacks Rank & Key Picks

Oracle carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks in the broader technology sector are Mellanox Technologies, Ltd. MLNX and Micron Technology Inc. MU, currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The projected earnings growth rate (3-5 years) for Mellanox and Micron are 15% and 10%, respectively.

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