Agreements driving future growth
In the agreement, salesforce.com, inc. (NYSE:CRM) will help Oracle Corporation (NYSE:ORCL) by supplying hardware including Exadata servers and Java middleware applications. salesforce.com, inc. (NYSE:CRM) will also support Oracle Corporation (NYSE:ORCL)’s Fusion Human Capital Management and Financial Cloud in its internal operations and further integration is likely due to customer demands for more integrated products. Moreover, salesforce.com, inc. (NYSE:CRM) will refer customers to Oracle Corporation (NYSE:ORCL) for its cloud applications, giving Oracle Corporation (NYSE:ORCL) an advantage over its competitors. This deal will also strengthen Oracle’s position in cloud-computing, resulting in market share gains and increasing gross profit to $33 billion in fiscal year 2014 from $30 billion in the last fiscal year.
salesforce.com, inc. (NYSE:CRM) will use Oracle’s database management system as a result of the agreement. This data sharing will make the products of both companies more attractive to buyers as it will add more features to their software offerings. The companies deliver around one million complex cloud-based transactions every day. salesforce.com, inc. (NYSE:CRM) will report year-over-year revenue growth of around 26% to reach $3.86 billion with earnings per share of $0.48 in fiscal year 2014.
Oracle also signed a similar deal with Microsoft Corporation (NASDAQ:MSFT) to allow Java developers to develop applications using Oracle tools on Microsoft Corporation (NASDAQ:MSFT)’s servers such as Hyper-V and Microsoft Corporation (NASDAQ:MSFT) Azure. Microsoft Corporation (NASDAQ:MSFT)’s cloud services will help Oracle customers move their workloads to Azure. Both companies will now run Java as well as Oracle database tools and Linux on Microsoft Corporation (NASDAQ:MSFT) Windows servers. In this agreement, Microsoft Corporation (NASDAQ:MSFT) will provide and support Java, and Oracle will do the same for Linux. This deal is one the largest deals in the software world, benefiting customers and helping both companies stabilize their position in the fast-growing cloud business.
With these agreements, Oracle expects to generate total revenue of $38.87 billion in the 2014 fiscal year, up from $37.18 billion in 2013.
Conclusion
Cloud technology helps software companies to grow a technology presence and enables them to serve their customers with more integrated software options. Adobe’s Creative Cloud and its acquisition of Neolane will help in driving its revenue further. Oracle’s new agreements will increase its future revenue and its cloud service capabilities. Salesforce expects wide opportunities for future growth due to its agreement.
I recommend a buy for all three of these stocks for long-term growth.
Shweta Dubey has no position in any stocks mentioned. The Motley Fool recommends Adobe Systems and Salesforce.com. The Motley Fool owns shares of Oracle.. Shweta is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article 3 Tech Companies Growing With Cloud Technology originally appeared on Fool.com is written by Shweta Dubey.
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