“Very importantly, as on-premise databases migrate to the cloud, either to OCI directly or using database at Azure or database at Google Cloud. We expect these cloud database services will be that third leg of revenue growth alongside OCI and strategic [SaaS] (ph).”

In context

“Database and OCI. Application subscription revenues which includes product support were $4.6 billion and up 6%. Our strategic back-office SaaS applications now have annualized revenue of $7.7 billion and were up 16%. Infrastructure subscription revenues, which includes license support were $5.6 billion up 13%. Infrastructure cloud services revenue was up 42%. Excluding legacy hosting, OCI Gen2 infrastructure cloud services grew 44%, with an annualized revenue of $7.4 billion. OCI consumption revenue was up 53% were it not for continuing supply constraints, consumption growth would have been even higher. Database subscriptions, which includes database license support, were up 6% and highlighted by cloud database services, which were up 26% and now have an annualized revenue of $2 billion. Very importantly, as on-premise databases migrate to the cloud, either to OCI directly or using database at Azure or database at Google Cloud. We expect these cloud database services will be that third leg of revenue growth alongside OCI and strategic [SaaS] (ph). Consistent with our strategic direction and reflecting customer preference for cloud services, software license revenues were down 14% and to $1.8 billion. So all in, total revenues for the quarter were $14.3 billion. That's up 4% if you include Cerner, up 5% excluding Cerner. Shifting to margins. The gross margin for cloud services and license support was 77%. This is a result of the mix between support and cloud, in which cloud is growing much faster than support. The gross margin percentages for software support and SaaS are consistent with last year, while IaaS gross margins improved substantially. Gross margins will go higher as more of our cloud regions fill up. We monitor our expenses carefully to ensure gross margin percentages expand as we scale. To that point, though the gross p”