Oracle (ORCL) Enhances IoT Portfolio With New Capabilities

Oracle Corp (NYSE:ORCL) recently announced notable changes in its Internet of Things (IoT) Cloud offerings. The product portfolio now includes artificial intelligence (AI) and machine learning features that strengthen digital twinning i.e. simulation of physical devices and the interconnection between those virtual version of the devices that is termed as digital threading.

Per the enhancements, users will now be able to access analytical insights from the connected devices. From an entrepreneurial perspective, these processed data will be valuable for increasing efficiency of the system and making new market opportunities accessible. This will in turn lead to higher and faster rate of return on investment (ROI) for consumers.

We believe the company’s growing cloud market share, its dominant position in the enterprise software and database as a service market along with the gradually strengthening IoT market will be key growth drivers in the long run.

Shares of Oracle have gained 33.2% year to date, outperforming the industry’s 26.4% rally.

Oracle’s Presence in the IoT Market

The company is slowly solidifying its foothold in IoT. Gemu, a world-wide manufacturer of valves is a major customer of the company’s IoT cloud service. Recently, Oracle announced collaboration with Mitsubishi Electric Corp. for the development of an IoT platform for advancement of automated manufacturing.

In today’s connected world, organizations are engaged in optimization of their manufacturing processes. The new platform known as FA-IT Open Platform will be collecting, analyzing and utilizing data from all end points of the manufacturing units in real time, thereby increasing cost-effectiveness and efficiency. This is anticipated to be a significant step for Oracle as far as IoT is concerned.

Growth Prospects and Key Players

In a recent report, Gartner mentioned that almost 8.4 billion connected “things will likely be used in 2017, reflecting a 31% increase from 2016. This number is projected to reach 20.4 billion by 2020." The market research firm also stated that investments on end points and services are expected to reach $2 trillion in 2017. Per MarketsandMarkets, the IoT market is anticipated to reach $561.04 billion by 2022 from $170.57 billion in 2017 at a CAGR of 26.9%.

Oracle will face stiff competition from prominent names in the space including Google’s (NASDAQ:GOOGL) Cloud IoT and Amazon’s (NASDAQ:AMZN) AWS IoT. Intel (NASDAQ:INTC) and IBM’s Watson Iot are also strong contenders in the field. However, given the promising growth rate of the market and Oracle’s enhanced offerings, the company’s top line is expected to grow.

Zacks Rank

Oracle currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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