| Constellation Research

Zscaler acquires Avalor for security data fabric

Editor in Chief of Constellation Insights Constellation Research

About Larry Dignan: Dignan was most recently Celonis Media’s Editor-in-Chief, where he sat at the intersection of media and marketing. He is the former Editor-in-Chief of ZDNet and has covered the technology industry and transformation trends for more than two decades, publishing articles in CNET, Knowledge@Wharton, Wall Street Week, Interactive Week, The New York Times, and Financial Planning. He is also an Adjunct Professor at Temple University and a member of the Advisory Board for The Fox Business School's Institute of Business and Information Technology.  Constellation Insights does the following: Cover the buy side and sell side of enterprise tech with news, analysis, profiles, interviews, and event coverage of vendors, as well as Constellation Research's community and…...

Zscaler said it will acquire Avalor, an Israeli startup that launched just 26 months ago, in a move that will aim to scale up Avalor's Data Fabric for Security.

The deal reportedly cost Zscaler $350 million, according to Globes. Zscaler, which said it paid mostly cash, is in a battle with CrowdStrike and Palo Alto Networks to convince enterprises to consolidate on their cybersecurity platforms. Microsoft and other giants are also in the mix.

Avalor's Data Fabric for Security includes 150 pre-built integrations to identify and predict vulnerabilities. Zscaler plans to add its 400 billion Zscaler transactions and its Zscaler Zero Trust Exchange to Avalor's platform. Avalor will continue to run as an independent unit.

Cybersecurity players are racing to add AI to platforms to combat emerging threats from AI.

Jay Chaudhry, CEO of Zscaler, said "with the Avalor acquisition, we can more effectively identify vulnerabilities, while predicting and preventing breaches."

Here's a look at Avalor's features.

Avalor CEO Raanan Raz said in a blog post arguing the Zscaler purchase accelerates its plans:

"By building on the flexible, extensible data model at the heart of the Avalor Data Fabric for Security, Zscaler now has the opportunity to dramatically advance the state-of-the-art in security insights. By applying the power of AI to this breadth of data, we can help organizations automate security operations across vulnerability discovery and prioritization, attack path and kill chain analysis, and threat remediation and prevention."

More:

Constellation ShortListâ„¢ Managed Detection and Response (MDR)

Constellation ShortListâ„¢ Endpoint Protection Platforms

Constellation ShortListâ„¢ Extended Detection and Response Platforms (XDR)

Constellation ShortListâ„¢ Cloud Native Application Protection Platforms (CNAPP)

Digital Safety, Privacy & Cybersecurity Security Zero Trust Chief Information Officer Chief Information Security Officer Chief Privacy Officer

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Your next Zoom meeting may be at an AMC Theatre

Larry Dignan

Editor in Chief of Constellation Insights Constellation Research

The movie theater may become a hybrid work location if AMC Theatres and Zoom have their way. AMC has rolled out Zoom Rooms in eight markets around the country.

According to the companies, the goal is to "redefine interactive business meetings and hybrid events." For AMC and Zoom the deal could be a win-win. AMC needs to fill theatres as the movie industry struggles due to streaming and Zoom would like to redefine hybrid and remote work.

The booking process is online, and you pick by location. For instance, AMC Empire 25 in New York City has 137 guests max and will run you $2,250 for a three-hour block. The Kansas City AMC Town Center 20 has a max of 150 guests and will cost $1,500 for a three-hour block. Bookings are usually available Monday through Thursday--peak work days that don't interfere with movie launches.

In a statement, the companies said Zoom Rooms at AMC are designed for dispersed workforces and customers who can be brought together for product launches, meetings, press conferences and hybrid events. The idea is to combine Zoom's technology with AMC's sight, sounds and seating experience.

The partnership with Zoom and AMC was first announced in 2022 to drive "state-of-the-art" collaboration. Initial Zoom Rooms at AMC locations include Atlanta, Chicago, Denver, Kansas City, Los Angeles, New York City, San Jose and Seattle/Tacoma.

Future of Work Next-Generation Customer Experience Data to Decisions Innovation & Product-led Growth New C-Suite Sales Marketing Digital Safety, Privacy & Cybersecurity zoom B2C CX Chief Information Officer

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Oracle adds generative AI features into Fusion Cloud, expands Azure partnership into Europe

Larry Dignan

Editor in Chief of Constellation Insights Constellation Research

Oracle said it has added generative AI throughout its Fusion Cloud Applications Suite and expanded its Oracle Database at Microsoft Azure effort into Germany with more regions around the world on tap.

The announcements were made at Oracle CloudWorld in London. The Oracle Database@Azure plans were previewed on Oracle's third quarter earnings conference call. With the launch of Oracle Database@Azure in Frankfurt, Oracle is planning on adding 15 regions globally including France, Italy, UK, India, Japan, Australia and United Arab Emirates and others.

Oracle CTO Larry Ellison said Japan is shaping up to be a big market for Oracle Cloud Infrastructure (OCI) and sovereign data workloads are critical.

As for the Fusion generative AI rollout, Oracle is layering in large language models into a business that had $800 million in revenue in the third quarter. The genAI features are added to finance, supply chain, human resources, sales, marketing and service applications.

Oracle said it embedded more than 50 generative AI features into Fusion Applications. Here's a brief roundup:

Fusion ERP gets insight narratives to surface patterns that affect the business with context and explanations. Oracle also added narratives for financial reporting, explanations for predictive forecasts and status summaries for projects.
Fusion Cloud Supply Chain and Manufacturing gets item description generation, supplier recommendations and negotiation summaries.
Fusion HCM gets category landing pages and generative AI built career sites in Oracle Recruiting, job match recommendations, tools so candidates can get answers to questions and manager survey generation.
Fusion Cloud CX gets service webchat summaries, tools to write sales content and recommendations for marketing collateral.

Oracle also added guided generative AI journeys in Oracle Cloud HCM and SCM with preferred large language model and frameworks to focus on industries.

Data to Decisions Innovation & Product-led Growth Future of Work Tech Optimization Next-Generation Customer Experience Digital Safety, Privacy & Cybersecurity Oracle AI GenerativeAI ML Machine Learning LLMs Agentic AI Analytics Automation Disruptive Technology Chief Information Officer Chief Executive Officer Chief Technology Officer Chief AI Officer Chief Data Officer Chief Analytics Officer Chief Information Security Officer Chief Product Officer

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Salesforce Reinvents Itself Again With Einstein 1

Chirag Mehta

Vice President and Principal Analyst Constellation Research

Chirag Mehta is Vice President and Principal Analyst focusing on cybersecurity, next-gen application development, and product-led growth. With over 25 years of experience, he has built, shipped, marketed, and sold successful enterprise SaaS products and solutions across startups, mid-size, and large companies. As a product leader overseeing engineering, product management, and design, he has consistently driven revenue growth and product innovation. He also held key leadership roles in product marketing, corporate strategy, ecosystem partnerships, and business development, leveraging his expertise to make a significant impact on various aspects of product success. His holistic research approach on cybersecurity is grounded in the reality that as sophisticated AI-led attacks become…...

Itâ€™s Albert Einsteinâ€™s birthday today. Einstein would not have imagined 885 people dressing up as him to set a Guinness World Record, 145 years after he was born. Salesforce held a special event last week in San Francisco, during their developer-focused conference, TrailblazerDX, where Trailblazers dressed up as Einstein to break a Guinness World Record. During this conference, Salesforce announced their next-generation AI platform, Einstein 1 Studio. The energy on the show floor was palpable as hundreds of developers hurried from expert sessions to demo stations to the Hacker Camp. Thousands of other developers tuned in online to stream the conference programming.

Over the course of years, Salesforce has made many bold decisions to continue to reinvent itself. On its 25^th anniversary this week, Salesforce once again reinvented itself by deciding to go all in with AI. When Parker Harris, co-founder of Salesforce, took the keynote stage to announce Einstein 1, he joked about him looking old. He was as energetic and beaming with enthusiasm as one can be. On a beach-themed stage, he even threw a beach ball to the next presenter after flawlessly pronouncing his name in single breath, Muralidhar Krishnaprasad, the engineering head of Data Cloud, who goes by MK. Parker also took the opportunity to remind the audience about Salesforceâ€™s 1-1-1 model: donating 1% equity to charitable causes, 1% products to non-profits, and 1% of employeesâ€™ time in community service.

Einstein 1 Studio includes Prompt Builder, Copilot Builder, and Model Builderâ€”three essential ingredients of a next-generation platform. Salesforceâ€™s post captures details on these specific components. At high-level, the platform caters to developers who want to build AI-driven experiences that can leverage Salesforce metadata, customizable workflows, and underlying predictive and generative AI-models that are either trained inside Salesforce or elsewhere. These Salesforce developers also want to maximize code reuse and program a system using a natural language. The foundation of Salesforceâ€™s big bet on AI is its fast-growing Data Cloud. MK talked up the role of Data Cloud in preventing hallucination and keeping Einstein 1 â€œgrounded in trust.â€

My insights

With Einstein 1, Salesforce is in a unique position to serve customers in three important dimensionsâ€”use data to strengthen AI, provide a platform to build and extend product experiences, and provide first-party and third-party solutions. Salesforce has clearly demonstrated their intent to lead their platform with AI. They are also matching their intent with investment in various areas, products as well as the underlying platform.

As Salesforce blazes forward with Einstein 1, and as CxOs closely navigate this fast-moving chaotic domain to make informed decisions about their own investment in AI, here are a few things worth highlighting:

Ecosystem beyond Salesforce

Einstein 1 platformâ€™s near-term roadmap is designed to help existing Salesforce customers to get the best out of their investment. There are many more prospects, however, who donâ€™t use Salesforce today, their products or the platform. These prospects are exploring their next-gen platform choices that include platforms from hyperscalers, niche AI vendors, and select global service integrators (GSI). Many of these prospects have also invested in various copilots. While Einstein 1 can clearly compete to win, itâ€™s unclear whether it is enough of a draw for these prospects to consider Salesforce. As copilots proliferate, customers want to avoid an interoperability nightmare. While most vendors do offer lower-level API integrations, lack of well-defined semantics and interfaces pose interoperability challenges for components that operate at higher levels.

And then there are large number of startups (ISVs) that have choices to make. Clara Shih, CEO of Salesforce AI, underscored the value proposition of Einstein 1 on why startups should consider building on Salesforce instead of investing their limited resources in building core AI components that Salesforce is heavily investing in. ISVs will continue to be the one of the biggest customers of any next-gen platform. If ISVs can get what they need from Salesforce, and if Salesforce can provide them effective distribution and commerce via AppExchange, there is an opportunity to enable a brand-new AI ecosystem.

Benchmarking next-gen platforms

While engineering and business efficiency gains from using a next-gen platform such as Einstein 1 are very real, the industry lacks KPI definitions and a benchmark to compare these platforms and measure ROI. Itâ€™s unclear what makes a copilot a great copilot or what makes a prompt designer a great prompt designer. Enterprise software vendors do use domain-specific KPIs such as time to close a ticket, increase in pipeline coverage etc., but IT leaders want to compare various platforms to better understand their ROI. While this is clearly not vaporware, IT leaders have been burnt before by making an early investment in technology they did not fully understand. There will always be a qualitative comparison, but a good set of KPIs ground everyone in facts. Itâ€™s time someone takes a lead to define what these KPIs could look like.

Bridging PX and DX

A promise of a next-gen platformâ€”the one that goes beyond code reusability, productivity gains, and natural language driven developmentâ€”is how fast one can go from an idea or a sketch to a working application with customer validation. AI can effectively help bridge the gap between product experience (PX) and developer experience (DX) with faster feedback loops. Finding the right problem to solve is equally, if not more, important than solving it efficiently. The last thing you want to use AI for is to increase the efficiency of solving a wrong problem. Salesforceâ€™s Flow Builder is the closest to a visual representation of a working application but itâ€™s not a prototyping tool. Salesforce and the rest of the industry have a unique opportunity to increase their focus upstreamâ€”investing in AI-driven declarative prototyping toolsâ€”to reap the benefits downstream, faster time to market and time to value.

Happy coding, or shall I say happy generating!

Tech Optimization Chief Technology Officer

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UiPath delivers strong Q4, will launch large language model

Larry Dignan

Editor in Chief of Constellation Insights Constellation Research

UiPath reported better-than-expected fourth quarter results with revenue growth of 31% as its automation platform gains traction. The company plans to launch a new large language model next week that "combines open-source algorithms, our specialized AI, proprietary business documents and communication data."

The company reported fourth-quarter net income of $33.92 million, or 6 cents a share, on revenue of $405 million. Non-GAAP earnings were 22 cents a share.

Wall Street was expecting fourth quarter non-GAAP earnings of 16 cents a share on revenue of $383.7 million.

As for the outlook, UiPath said first quarter revenue will be $330 million to $335 million, compared to estimates of $338 million. For the fiscal 2025, UiPath projected revenue between $1.55 billion to $1.58 billion, relative to estimates of $1.53 billion.

UiPath CEO Rob Enslin said the company saw a strong close to the fourth quarter and the company's Business Automation Platform was delivering value for customers.

"We reported a strong close to the fiscal year exceeding our guidance across both top and bottom-line metrics driven by demand for the depth and breadth of our platform and the team's focus on customer success, which is at the core of everything we do," said Enslin. "C-level executives are no longer solely prioritizing digital transformation. They're also prioritizing AI transformation. I believe that the combination of AI and automation is the strategic change enabler for our customers."

For fiscal 2024, UiPath reported a net loss of $89.9 million on revenue of $1.31 billion, up 24% from a year ago.

During the quarter, UiPath launched UiPath Autopilot for Studio and Test Suite in public preview, expanded partnerships with Deloitte and Google Cloud and outlined new features for its Business Automation Platform.

Key points from the earnings conference call:

UiPath large customers are trading up RPA investments to the full automation platform.
"The SAP partnership is progressing well. And we are pleased with a momentum and pipeline generation across geographies," said Enslin.
A partnership with Microsoft looks promising. "We continue to deepen our partnership with Microsoft. This brings AI powered automation to customers using Microsoft Azure," said Enslin. "We see opportunities to expand this collaboration to accelerate our joint customers' move to the cloud with AI infused industry solutions and enterprise modernization with Microsoft.â€
Enslin said UiPath will continue to invest in sales for new verticals including "investments in growth specialist sales engineers to support our customers and further industry verticalization in areas like financial services, insurance, health care and public sector."

Data to Decisions Tech Optimization Innovation & Product-led Growth Future of Work Next-Generation Customer Experience Revenue & Growth Effectiveness Chief Information Officer

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Microsoft's Copilot for Security will go for $4 an hour

Larry Dignan

Editor in Chief of Constellation Insights Constellation Research

Microsoft launched Copilot for Security, but the most interesting item is the software giant's monetization model. Copilot will go for $4 an hour in a pricing model that positions generative AI more like a digital worker.

Copilot for Security will be generally available April 1 under a consumption model that covers Copilot as a standard experience and embedded across Microsoft's security portfolio.

Microsoft said the consumption model enables enterprises to start small experiments without per device and per user charges. Customers can use existing Azure accounts and be billed $4/hour via a Security Compute Unit. The per hour pricing is a notable move given the industry's $30 per month per user norm.

According to Microsoft, Copilot for Security will enable security and IT pros to catch signals, intelligence and signals across the threat landscape via a large language model that outlines insights and next steps.

Generative AI is being leveraged across security platforms including CrowdStrike, Palo Alto Networks and others. Microsoft also wants to be seen as a security platform and other hyperscalers are in the mix. For instance, Google Cloud launched Security Command Enterprise, which fuses multi-cloud security, AI and SecOps.

Each of these cybersecurity platforms are looking to capitalize on enterprise efforts to consolidate vendors and get more for their money.

Describing the end user feedback from their private access program, Vasu Jakkal, Corporate Vice President of Microsoft Security, said: "We surveyed, 97% of end users actually got joy out of using the Copilot.â€ When asked about how Microsoft intends to go to market with their security offerings, she added, "after three years of its inception, security is no longer an attach motion for Microsoft; it's a standalone business."

Chirag Mehta, Vice President and Principal Analyst, covering cybersecurity at Constellation Research, attended a security event from Microsoft to learn more about the Copilot firsthand, said:

â€œMicrosoftâ€™s investment in their security portfolio signals their intent to double down in the cybersecurity domain. Leveraging their partnership with OpenAI, Microsoft continues to embrace Generative AI to strengthen their offerings. Security Copilot is an example of using Generative AI to make security more consumable, and to better equip IT and security professionals to defend against sophisticated attacks when there is scarcity of people with cybersecurity skills.â€

Copilot for Security includes:

Custom promptbooks to save natural language prompts for security workflows.
Knowledgebase integrations that are in preview.
Multi-language support.
Third-party integrations.
Microsoft Entra audit and diagnostic logs.

Digital Safety, Privacy & Cybersecurity Data to Decisions Innovation & Product-led Growth Future of Work Tech Optimization Next-Generation Customer Experience Microsoft Security Zero Trust AI GenerativeAI ML Machine Learning LLMs Agentic AI Analytics Automation Disruptive Technology Chief Information Officer Chief Information Security Officer Chief Privacy Officer Chief Executive Officer Chief Technology Officer Chief AI Officer Chief Data Officer Chief Analytics Officer Chief Product Officer

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Zendesk acquires Ultimate, builds out AI agent platform

Larry Dignan

Editor in Chief of Constellation Insights Constellation Research

Zendesk said it will acquire Ultimate, a chat-based service automation company that has UltimateGPT and a bevy of integrations with service platforms.

With the purchase of Ultimate, Zendesk said it will "offer AI agents with enhanced intelligence that are not just reactive, but proactive problem solvers." Zendesk CEO Tom Eggemeier said in a statement that the purchase of Ultimate will free up human agents to build relationships and resolve complex challenges.

Reetu Kainulainen, CEO and co-founder of Ultimate, said the deal with Zendesk is about melding human and AI agents to service customers.

Ultimate's AI agents can handle up to 80% of support requests by levering backend knowledge bases.

The purchase is expected to close this month. Zendesk was already integrated with Ultimate, which also integrates with Salesforce, Freshworks, Live Chat and others.

Zendesk has been beefing up with acquisitions. The company recently closed the purchase of Klaus, which has AI-powered quality assurance for customer experiences.

Next-Generation Customer Experience Data to Decisions Innovation & Product-led Growth Future of Work Tech Optimization Digital Safety, Privacy & Cybersecurity ML Machine Learning LLMs Agentic AI Generative AI AI Analytics Automation business Marketing SaaS PaaS IaaS Digital Transformation Disruptive Technology Enterprise IT Enterprise Acceleration Enterprise Software Next Gen Apps IoT Blockchain CRM ERP finance Healthcare Customer Service Content Management Collaboration GenerativeAI Chief Information Officer Chief Executive Officer Chief Technology Officer Chief AI Officer Chief Data Officer Chief Analytics Officer Chief Information Security Officer Chief Product Officer

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Let's Talk DXPs: A CR CX Convo with Liz Miller

Liz Miller

Vice President & Principal Analyst Constellation Research

About Liz Miller: Liz Miller is Vice President and Principal Analyst at Constellation, focused on the org-wide team sport known as customer experience. While covering CX as an enterprise strategy, Miller spends time zeroing in on the functional demands of Marketing and Service and the evolving role of the Chief Marketing Officer, the rise of the Chief Experience Officer, the evolution of customer engagement, and the rising requirement for a new security posture that accounts for the threat to brand trust in this age of AI. With over 30 years of marketing experience, Miller offers strategic guidance on the leadership, business transformation, and technology requirements to deliver on today’s CX strategies. She has worked with global marketing organizations to transform…...

Let's talk about DXPs. Digital experience platforms are all the rage as executives across IT and CX are hoping the platform can bring some order to digital chaos. But there are some problems...first of which the very definition of what a DXP is or is not is much debated and the descriptor of "core set of tools" is all too often left up to enterpretation. Liz Miller talks through how she has faced the issue of what a DXP and why some unlikely contenders made their way onto the Constellation Research Shortlist.

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Google Cloud's healthcare push accelerates with Vertex AI, MedLM, Healthcare Data Engine

Larry Dignan

Editor in Chief of Constellation Insights Constellation Research

Google Cloud said its Vertex AI Search for Healthcare with integration with MedLM and Healthcare Data Engine v2 is generally available.

The announcement, made at HIMSS 2024, highlights how Google Cloud is pushing into the healthcare industry, which wrestles with data silos and multiple electronic medical record systems. Google Cloud's plan is to combine Healthcare Data Engine, MedLM and foundational models to drive efficiencies.

Aashima Gupta, Global Director of Healthcare Strategy & Solutions at Google Cloud, said generative AI use cases started out with skepticism in healthcare, but now is seen as a key component to innovation. The industry is "assessing where the most data intensive manual work is for non-value tasks such as note taking, summarization, finding information and synthesizing information," she said.

"We are seeing possibilities for genAI across the value chain," said Gupta, who noted that employees, nurses and clinicians are seeing workflow improvements. She added that the industry is looking for low-hanging fruit for uses cases and expanding from there. Healthcare providers are also investing in the data foundation needed to implement genAI.

More healthcare:

Google Cloud's play in healthcare is to lean into its search capabilities and leverage genAI to synthesize information across multiple systems. "GenAI has moved much faster than any project we have seen, and we are moving from pilots in some cases into production," said Gupta.

Here's a breakdown of the announcements:

Vertex AI Search for Healthcare. Lisa O'Malley, Senior Director Product Management for Google Cloud Industry Products, said the company is looking at streamlining processes like prior authorization claims, submissions and reviews easier between providers and payers. In life sciences, O'Malley said Google Cloud is looking to reduce the administrative burden with clinical trials.

"This is really about driving insights and information to clinicians," said O'Malley.

Healthcare Data Engine v2. O'Malley said that MedLM and Google Cloud's Healthcare Data Engine v2 is moving beyond proof-of-concept to production in healthcare organizations. "We are starting to see these assistants do more complex tasks like nurses creating a handover to the next shift," said O'Malley.

Richard Clarke, Chief Analytics Officer at Highmark Health, said generative AI is part of an effort to improve experiences. "We're doing everything we can to be more proactive, personalized and enabling patients and clinicians to focus on health," he said. "In order to do that we knew we need a better digital experience, interoperability and data and AI."

Clarke said the Google Cloud healthcare tools are building blocks to create better outcomes. For instance, Highmark is using Vertex AI and Healthcare Data Engine to connect the dots between Epic, an electronic medical record system, survey, records and systems of engagement to provide insights and proactive interventions.

"This next best action system is leveraging Vertex for more than 700 billion data points across our entire population to identify next best actions," said Clarke. "We see that growing substantially as we onboard new data sources."

In the second quarter, Highmark will use Google Cloud to create a learning healthcare system, which is a closed loop system that will collect information from Epic and other systems and make recommendations. "It will be rolled out by the end of the second quarter," said Clarke. "I think we're finally getting past is we're data rich and insight poor. It is a use case rich environment. The challenge has been scale."

Data to Decisions Digital Safety, Privacy & Cybersecurity Innovation & Product-led Growth Tech Optimization Future of Work Next-Generation Customer Experience Google Cloud Google SaaS PaaS IaaS Cloud Digital Transformation Disruptive Technology Enterprise IT Enterprise Acceleration Enterprise Software Next Gen Apps IoT Blockchain CRM ERP CCaaS UCaaS Collaboration Enterprise Service AR AI GenerativeAI ML Machine Learning LLMs Agentic AI Analytics Automation Chief Information Officer Chief Technology Officer Chief Information Security Officer Chief Data Officer Chief Executive Officer Chief AI Officer Chief Analytics Officer Chief Product Officer

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Oracle's Q3 IaaS revenue up 49%

Larry Dignan

Editor in Chief of Constellation Insights Constellation Research

Oracle reported better-than-expected fiscal third quarter earnings and said cloud revenue was $5.1 billion, up 25% from a year ago. Infrastructure-as-a-service revenue was $1.8 billion, up 49% from a year ago, with SaaS at $3.3 billion, up 14% from a year ago.

The company reported third quarter earnings of 85 cents a share ($1.41 a share non-GAAP) on revenue of $13.3 billion, up 7% from a year ago.

Wall Street was expecting Oracle to report fiscal third quarter earnings of $1.38 a share on revenue of $13.3 billion.

CEO Safra Catz said Oracle landed large cloud infrastructure contracts in the third quarter to drive the company's remaining performance obligations up 29% to $80 billion.

"We expect to continue receiving large contracts reserving cloud infrastructure capacity because the demand for our Gen2 AI infrastructure substantially exceeds supply—despite the fact we are opening new and expanding existing cloud datacenters," said Catz.

Catz added that 43% of Oracle's $80 billion RPO will be recognized as revenue over the next four quarters.

Oracle CTO Larry Ellison said Oracle finished moving most of its Cerner customers to its cloud infrastructure. That move sets the stage for product launches. Oracle's plan for Cerner: Cloud shift, generative code rewrite

Ellison said:

"In Q4, Oracle will start delivering its completely new Ambulatory Clinic Cloud Application Suite to these same customers. This new AI-driven system features an integrated voice interface called the Clinical Digital Assistant that automatically generates doctors' notes and updates Electronic Health Records—saving precious time and improving health data accuracy."

Ellison, who has been relatively quiet about Cerner, said Oracle is set to "transform Cerner and Oracle Health into a high-growth business for years to come."

On a conference call with analysts, Catz said "OCI has emerged as the largest driver of our overall revenue acceleration" and the company is landing workloads via its integrated stack for AI and databases. "This quarter marks the first time our total cloud revenue is more than our total license support revenue," said Catz.

Catz added that OCI consumption revenue was up 63% in the quarter and could have been higher with more capacity. Cloud database services revenue was up 34% and is seen as "the third leg of revenue growth alongside SaaS and OCI," she said.

As for the data center buildout, Catz said she expects overall gross margins to continue to go higher. "While we continue to build data center capacity, overall gross margins will go higher as more of our cloud regions fill up," she said. "We monitor these expenses carefully to ensure gross margin percentages expand as we scale. We are working as quickly as we can to get the cloud capacity built out given the enormity of our backlog and pipeline."

She said capital expenditures should end the fiscal year around $7 billion to $7.5 billion. "we now have 68 customer facing cloud regions live with 47 public cloud regions around the world and another eight being built. 12 of these public cloud regions interconnect with Azure and more locations with Microsoft are coming online soon," said Catz.

Going forward, Catz said the company's operating margins will improve from cloud scale and bringing Cerner profitability up to Oracle's standards. She said fourth quarter revenue will accelerate from last year and will be significantly higher in fiscal 2025 without the Cerner headwind.

In the fourth quarter, Oracle revenue including Cerner will grow 4% to 6% and without Cerner will grow 6% to 8%. Total cloud revenue without Cerner will grow 20% to 24% in the fourth quarter. Non-GAAP earnings will be between $1.62 to $1.66 a share.

Ellison said:

"In addition to selling infrastructure for training AI large language models, Oracle is completely reengineering its industry specific applications for generative AI."

Later on the conference call, Ellison had some interesting comments about data sovereignty and how the company's autonomous database may make some strange bedfellows.

Ellison added his take on multi-clouds and opened the door to building OCI regions inside of other hyperscalers in a move that would rhyme with Oracle's Azure partnership. Oracle's Autonomous Database would be the reason multiple clouds would partner with the company. Ellison said:

"We expect the multi-cloud initiative to continue to expand amongst other hyperscalers where we build we build OCI regions inside of and coexisting with their existing cloud infrastructure. We think the world the era of walled gardens is coming to an end. What customers really want is the ability to use multiple clouds that talk to one another. It is really called cloud computing. It's not called a bunch of separate clouds. We expect multi-cloud to become the norm and Oracle DB to be available everywhere. We think that will preserve our franchise in database because the autonomous database is a unique piece of technology, and there's nothing like it in the world. No one else is working on anything like that. No one else is even trying to duplicate the autonomous database. We think it will be it will become a very successful product. In every cloud."