Oracle


ORCL

and Spain-based Telefonica España

inked

a multiyear agreement to ramp up migration of the latter’s mission-critical database systems on to Oracle cloud platform and develop new communications services.

Headquartered in Madrid, Telefonica España is one of the well-known

telephone

operators and mobile network providers with operations spread across 13 countries in Europe and Americas. Some of its most notable brands include Telefonica, Movistar, O2 and Vivo.

Partnership with Oracle is part of the company’s strategy to overhaul technological infrastructure and build an “open-standard platform” to support its expanding portfolio of digital services like 5G, Internet of Things (IoT) and services hosted in association with network partners as well as Independent Software Vendors (ISVs).

The telecom company will shift a majority of its Oracle Database systems to Oracle Exadata Cloud@Customer platform.

Oracle Exadata Cloud@Customer will be available as a managed cloud service in Telefonica’s data centers. This will help the telecom company to slash costs as well as comply with data residency requirements and unify all vital business systems on a single platform.

Migrating database systems to the Oracle Exadata Cloud@Customer platform will help Telefonica España to create an on-premises cloud platform to support some of its vital operational and commercial systems like business intelligence systems, customer relationship management (CRM), billing and revenue management as well as OSS applications and platform, noted Oracle.

Oracle will offer a “secure, highly available platform” for the telecom company by leveraging Oracle Cloud Infrastructure (OCI).

This secure platform will aid Telefonica España to modernize the development and delivery of new services by assimilating data across its operations. The platform will also enhance the company’s service capabilities by embedding innovative technologies like machine learning and Artificial Intelligence as well as improving scalability of these services, added the tech giant.

Higher Demand for Cloud Services in Telecom Augurs Well

Global telecom cloud market is expected to witness a CAGR of 22.67% between 2021 and 2028,

according to a Verified Market Research report

. The key catalyst driving the market is rapid modernisation of the IT infrastructure of telecom companies. The companies are overhauling infrastructure to  cater to the higher demand for voice, data and broadband services as pandemic-induced work from home and stay at home trends continue.

Higher demand for browser-based communication solutions along with the need to cut down operational costs, boost scalability and reduce downtime is fueling the market growth.

Oracle is fast gaining ground in the lucrative cloud domain. The company’s software-as-a-service (SaaS), infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) products are likely to grow strongly over the next few years as enterprises transition to the cloud.

In the first quarter of fiscal 2022,

management noted that the company’s IaaS and SaaS business contributed 25% to total quarterly revenues with an annual run rate of $10 billion.

Increased availability of Oracle cloud regions globally is consolidating its competitive position in the cloud computing market. The company currently has 30 cloud regions in the world.

Oracle’s Exadata Cloud@Customer service offering is gaining traction among on-premise customers. In the last reported quarter, the company clinched deals from  Deutsche Bank, Macif insurance, New Jersey Office of Information Technology and Electronic Transaction Consultants (“ETC”) among others.

Noteworthy deal wins for OCI services in the last reported quarter include Telefonica Brasil, Pernod Ricard, Crunch Mediaworks, Polpharma and Netherlands-based Liberty Global.

However, higher spend on product enhancements, especially toward cloud platform, amid increasing competition in the cloud domain from established players like

Amazon


AMZN

,

Microsoft


MSFT

and

Alphabet

’s

GOOGL

Google Cloud is likely to limit margin expansion in the near term.

Oracle currently carries a Zacks Rank #3 (Hold). You can see


the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

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