Oracle Corporation (ORCL) Earnings Call Transcript & Summary

10 years ago, it was truly a differentiator. Is it still today? Is anyone else...

Absolutely. Yes.

All right. We got 1 minute left, Ken?

Yes.

We're good?

Thank you.

All right, guys. Thank you, guys. Appreciate it. Thank you.

Okay. Should be a slide coming up here momentarily. Excellent. A couple of things here. One is a little bit of inaudible. I don't know if any of you have noticed, but we have an issue with one of the lights. We've cleared the people so that nobody gets splatted. But at lunch, we were planning to have you take your lunch right here and bring it back. We're going to need to clear the room. We need to get some facilities people in here, take care of that, so we don't have a problem. So just as a heads up. Now over the weekend, here's what you're going to be binging. This is what you want to watch. And instead of watching your Netflix, your AWS or whatever it is that you watch, watch this. You got a little bit of a taste here. But I was at a dinner last night, and I was telling people at dinner that in the 12 years I've been here now, I've never been more excited than I am right now in that everything is just, and I mean everything, is just lining up perfectly. You've got a taste of it here. But watch these videos. In particular, Clay and Steve, watch those. Watch the first part of Larry to get OCI. Watch the second part to go for a deep dive on health care. Watch Safra to see the customer focus. Watch TV, watch Oracle, you're going to come away extremely excited about like, wow. Now some of you may say, "Well, we'll see." Fine. But you were told here at this Cloud World, how this is going to play out. You were told, I'm on record, it's all recorded. So thank you very much. And what we'll do now is we're going to now shift to a conversation, talking about reality, real customers, right? And what we're [Audio Gap]

Hope you can hear me okay. Yes? So Ken was really nice, and he called me. He said, Jonathan, do you mind doing -- talking a little bit about what we're doing with our largest customers in 3 of the largest industries in the world? I said, "Sure, yes." And then he said, "Can you do in 15 minutes?" So clearly, I've fallen for that, saying. Thanks for that, Ken. So look, just to introduce myself. And I think I need to click this for this to happen. Oh, that's Ken's slide. And just to introduce myself, basically, what I -- what my job in Oracle is, is to spend time with our top 200 customers and earn the right to partner with them to solve their biggest problems. These are big problems with big customers. And it leverages everything you've heard about so far. It leverages all of our technologies, all of our applications, all of our partners' applications that have to become part of the solution. So when you think about that, it is a big and exciting job, and I thank everyone for giving me the opportunity to do that. But I would say this, here's the nub of this. To get a customer from buying, to calling us when they have a problem or they have an opportunity, that's the big shift, and that's what we're trying to achieve. So I'm going to talk about 2 things across 3 industries. First of all, how do we solve big problems today, and then I'm going to talk about how we're partnering with our customers for the future, right? And I'm going to talk about what it takes. I'm going to talk about what are the things that we have to focus on in order to be successful with that. And then this is probably my second -- my first mistake was that I want to talk about telco when we had so many of our customers talking about telco all week. So hopefully, you've missed their sessions and you can have an abstraction of what they said coming from me. When I think about the telco industry today, when I talk to telco customers, they have a buzz. They have a spring in their step. They've gone through a decade of putting all the capital to build 4G networks all around the world and then let Netflix and Facebook and others take all the money. They suffered badly for a decade, right? Sometimes even more. 5G is coming. And 5G is their opportunity to come back. I don't know if you heard Scott Petty from Vodafone was talking the other day, and he was saying, they have a decade to live or die as telcos. This is a dramatic, dramatic moment. Now the opportunity is there and it's great, but it isn't easy to do. And when you think about 5G, everyone thinks about the network and how much the bandwidth is going to be, and this is going to be great. But how do you monetize that? That's super complicated. So let me take you through a scenario, right? If you're running a 5G network, right, you might decide to run it on your own, you might decide to run it on cloud. One of the things that 5G allows you to do is to differentiate for a level of service. Today, all of us have a mobile phone. And we suffer exactly the same if we're in the wrong cell or in a different place and the network goes down. With 5G, you can pay more and get better service. Now to do that, you need to prove that you can actually offer better service. So a lot of the telcos are going to want to run networks twice on their own and in the cloud and 2 clouds. That's a big challenge, right? Let's say you solve that problem, you put everything on OCI, put everything on another network -- on another cloud platform. Well, here's your problem: you've done that, but there is no provisioning system today in the world that knows how to provision into 2 networks at the same time. So you got to think about your provisioning platforms. Now you obviously need to change your billing platform because the concept of level of service does not exist in your billing platform, right? Your billing platform counts clicks, not a high-value click, right? And they do that if you need to change your product catalog. You need to change the ads. You need to change your CRM systems. You need to change your ability to take the revenues. So when you think about the small thing, oh, let's just monetize 5G, the big question is how do I do that and not just solve one bottleneck in this big problem, but how do you remove all the bottlenecks, right? And that's what we're trying to do. That's what we're working with our customers. None of them is doing all of it at the same time. So we're starting in different places, and you see some of our good friends here. I mentioned Vodafone already, but AT&T working with us on the ERP side. Vodafone is working with us across the board and also in the infrastructure and OCI side. The point is this is a big problem that they all face. Now the second thing is now that you've enabled yourself to monetize 5G, well, where are you going to sell, right? So if you look at it historically with 4G, the focus was consumers. In 5G, there's an opportunity to move to the enterprise space. But for that, you need to sell enterprises new things. Now most of the telcos do not have the capability to do just that, right? Because they cannot develop industry applications that will be sufficiently valuable for people to pay for. They don't know how to sell industry applications. So we're partnering with a lot of the people here you see on the screen on how to develop industry applications. So for example, we partnered with -- I'm trying to think what I'm allowed to say, with Telecom Italia, around providing services to government. That contract has just been awarded. We've partnered with Orange, which is not on the screen, in West Africa to deploy health care solutions. And you look at that and you think, "Oh, so how is that going to work," right? But the key is it's a partnership. They need the industry applications. We need the connectivity. Those things don't work today because the applications have not yet been fully developed. So we've got to do it together. So if you think about the end-to-end challenge here, it's going to take time because you're solving big problems. But I believe that Oracle is uniquely positioned because we're the only people who can do both, solving not just a network problem but all the way through the value chain, but then develop industry applications on top. So if I brush through telcos, which I -- which is probably less risky, I'm going to talk about banking, which I think is really interesting choice of an audience because you probably know about it much more than I do. But if I were to talk about banking at the very abstract level of what we're doing with our customers, there's obviously huge turbulence in the markets, and everyone talks about that need to be very effective in a volatile market. But there's also 2 more things that I think are putting huge pressure. One is obviously fintech and the disintermediation of banks. Now you will say to me, yes, but the large fintechs are regulated. But they win a lot of mind share before they get to win a lot of market share. And so before the regulator, they're already disrupting you. Whereas you as a bank, you're regulated, you need to provide the service, the reality is that you need to compete with fintechs even if they're not successful. That's a tough business. Now you then think about the fact that they're regulated, right? And regulation, we think about it as, oh, you need to manage your risk, which is true, they do have to manage the risk, and I'll talk about that in a second. But they also -- this also has implications on their cost base, right? So if you just look at infrastructure, some of the bigger banks, infrastructure is 7% to 9% of their entire cost base. Now how do you move to cloud if you're operating in 90 countries? No one has cloud in 90 countries. So how you're going to do that? We have data residency issues, you have control issues. And that's one of the things that we helped -- I think there's a colleague here from Deutsche Bank. Gordon from Deutsche Bank was talking about it with Safra the other day. We're helping to do that by bringing the cloud to all of their locations around the world. So if you think about those pressures, I'll just talk about 2 things that we're doing. One is risk in finance. Now people in banking say risk in finance is very quickly. But the reality is it's a very big problem to solve. And most people focus on the finance. So for example, you've heard from Macquarie, you've heard from SMBC, they're solving the finance problem. When it comes to risk in finance, the problem is slightly different. So I'm going to do that in 1 minute. When you look at managing risk, you're managing at a very granular level of data. You imagine at the transaction level, what's the risk of that transaction? How do I abstract the risk from those transactions into the position that the bank has? And then you report that, to the regulators, to the rest. When you look at finance, you're looking at your positions from a completely different perspective. It's abstracted. It's transactions coming in and out in terms of you and your own finances. It's a completely different thing. The problem is how do you match the 2 things, right? You make sure that your risk data and your finance data corresponds to each other. And that's a tough problem to solve. Now it says that top 10 bank -- look, banks don't want to talk about it when they're doing this because the regulators want to see that it works, right? So -- but we're working with some of the biggest banks in the world. You will hear about it when they go through their entire regulatory approvals of these platforms. But we're working with them to solve this big problem using Mike's financial services data analytics foundation, Steve's finance and accounting hub and linking all of that, and more importantly, linking all of those platforms to huge amounts of data sources, core banking platforms, payment platforms, ForEx platforms, using our technology. That's a big problem that we're solving down on the left. Steve talked about JPMorgan. He talked about what we're doing in terms of payments. You may remember, it has been through the pandemic, we also partnered with HSBC. We linked HSBC's commercial banking services into NetSuite. Now if you think about that use case, because you've heard about the other one already, it's a really interesting situation. NetSuite is the platform which -- I don't know if it's exactly the majority, but a huge share of companies that go through IPO in the U.S. use. Now they go through IPO, they get all this money. First thing they need to do is go and globalize, right, go earn new markets. Now the challenge for them is they're small companies, right? They don't have the sophistication of treasury, ForEx, managing across different countries. They can click on HSBC tab within NetSuite and link to their commercial banking to get ForEx, to get treasury. Now you think about embedded banking in this context, the simplification for enterprises is unbelievable, the value to the banks is unbelievable because they work directly with their customers, they're earning new customers with a click of the button, which, for us, is a hugely exciting proposition. I'm going to spend the last few minutes on an industry that usually, if we're honest with ourselves, we're not very well known in, right? We talk about telcos, we talk about banking, we talk about health care, we talk about security. But we're really talking about consumer packaged goods. If I look at the very highest level, the 2 main things that we're looking at with consumer goods customers. The one thing is the notion to go to direct to consumers. And you got to remember that these guys are manufacturing stuff that you put on shelves in supermarkets usually, right? And they have huge dependency on retailers. When they have set the retailer, they put them in the low shelf in the back, right? So no one finds it. But that means that all their margin goes. So Nespresso is a really exciting story because what they did, as they decided, Nestle decided, Nespresso is a separate business unit, we're only going to go direct, right? So our highest profit product is going to be direct to consumers, and we're going to avoid all of our distribution channels. That's a bold move, right? And it's a $10 billion in its own right. And I think -- I don't think there are many hotel rooms around the world that don't have a Nespresso machine, which I'm grateful for. The point is they built these capabilities on Oracle Cloud customer. Now you say, well, but that's technology. You're talking about business here. Well, there is no direct-to-consumer app, right? You're talking about a small number of very big companies with very different requirements, and they all need to do it themselves. So what they do is they choose the best architecture to do that and then use components on top. Some of them from us, some of them, they develop some of them for other people, but that allowed them to go direct-to-consumer. On the other side, and that's a huge pressure on CPG companies, logistics companies, transportation companies, is sustainability. Sustainability is exceptionally important to these customers more than usual. And the reason is the following. The reason they can go direct to consumer. The reason they can get the best place on the shelf in the supermarket is because of their brand. Now consumers are way ahead of enterprises in terms of their genuine belief in the need for sustainability. So if they know that the product that they're buying is not sustainable, they will move to a different brand. They have to be sustainable or the brand value is going to diminish. So from their perspective, they need to focus on that. They do that by making dishwasher powder more efficient, but they also do that in the logistics side of the business. And Unilever deployed our Oracle Transportation Cloud across the world. Now this is about optimizing how you get your trucks to the stores or to your shops. This is a bit different when you do it in India. I just came back from Mumbai a couple of weeks ago. Different in India than in Copenhagen, believe you me, right? You've got to do all of it, and they did that. They deployed across the world to improve their cost base and improve their sustainability. So that's just a whistle-stop tour in 30, 40 minutes of some of the exciting things we're doing with our largest customers in 3 industries. Thank you so much.

Please welcome Executive Vice President, Corporate Operations, Doug Kehring.

Okay. It's great to be back, and it's really great to be back in person. It's been 3 years as we were discussing earlier. And I think as you all have seen earlier in the day, amazing amount of technology that we've been able to generate in the last couple of years. What I wanted to do today is provide a transition. I'll talk a bit about the financials between what we're doing on the technology side and really in preparation for Safra and Larry to talk more on the strategy side. We'll just go through the usual safe harbor statement. If I can get the slides up that Ken went through also the non-GAAP financial measures, which I'll be using throughout my presentation today. So let me start with the -- with kind of where we're at. It's a really exciting year. As I think most of you know, our consensus expectations for this fiscal year is to reach the $50 billion revenue milestone. It's a huge hurdle here for Oracle because I think as most of you know, there are very few technology companies that have ever reached this marker. So we're really excited at Oracle to talk about how we -- not only how we got to $50 billion, but really how we're going to get even more in the bank going forward. So let me recap real quickly the mission because this is an encapsulation of what we discussed earlier and really throughout the week here. And that, again, is a very crystallized vision that we have, which is to focus on delivering end-to-end automation to solve the most complex business challenges for our customers. And it's the reality of what we put together makes us -- it puts us in a very unique position. But on top of that, before I talk about some of those differentiators, I just want to talk about these 3 pillars that are up here that are really built around this idea that we've been moving from a product-based company to a services-based business. I've spent the last 7 or so years at Oracle, helping us internally transform to really focus on these things. So on the first point here is the customer focus. We are -- and I think as you heard from Jonathan and others -- really oriented to how do we best help our customers, and part of that is having flexibility. So we don't just have one model, for instance, we don't just have the public cloud. We've got public cloud. We've got on-premise, we've got hybrid and we've got these dedicated region notions of putting it in your data center. And it really helps us be in a position where no matter where an organization is in their life cycle, if it's a startup, growing fast or it's a more mature company trying to just wring out efficiencies, doesn't matter where they're at, we can help them succeed on that mission using automation. In the middle is a really interesting concept, which is around accountability. Given the breadth of our portfolio, we're in a unique position compared to our competitors to be the single throat to choke. But more properly, the single point of accountability, full responsibility, more of a positive statement as opposed to a negative one. And the idea being is that we can get in there and really whatever it is, whatever their product technology requirements are, we'll make sure it works. And we've got it not only just the technology, but all the services that back it up, all the advanced customer services, our support organization, our development and engineering teams. All of these groups are now working in very close harmony in order to make sure that customers succeed. And that really drives to the third pillar, which is value maximization. At the end of the day, none of this works if it doesn't drive an ROI for our customers. And part of what we've been doing is building on, for instance, as Clay has talked about this common technology platform, which really allows us and our customers to run their workloads much more efficiently than they would have otherwise. And not only that, but they get all the great things like security, scalability, reliability, et cetera, that they've come to expect if it's in their own data center that they can get from Oracle. Now what sets us apart? As we look back and reflect on this week, one of the interesting things -- and I'll be recapping a lot of what you've already heard and try to crystallize it. We really believe we're the most complete enterprise technology vendor that's out there. It puts us in a very unique position because we -- not only across the applications. I mean you heard about Steve Miranda and the back office strength, but we also have the CX applications and then with Mike and the industry-based applications. Being able to harmonize all these things to uniquely help customers is something that none of our competitors can do. But we don't stop there. We also have the full platform, not just the compute and storage, but all the way through to the most popular database in the world. When our applications -- our own applications are built on this infrastructure, it creates that -- those unique attributes that we talked about earlier that really drive all the ability for us to scale up and help our customers. And now we're seeing it even more and more because our ISVs are coming to us. I mean a lot of what I spent this week, I also have part of the partner network where we're reinventing for our ISVs, how they can really take advantage of the Oracle Cloud infrastructure to run their applications, but also to then connect easily into our broader application ecosystem. Now it's not just about having the most complete enterprise portfolio in the -- we think, in the world. But it's also the idea that it's a very big addressable market. When we look across applications and infrastructure, we're talking about $750 billion just on the software spend. That doesn't even account for other -- certain other things like professional services and hardware. So we're at $50 billion, targeting $750 billion just in software. There's still a lot of room for us to improve. And we get to do that because we have one of the largest installed bases in the world. 430,000 customers run different parts of Oracle technology. Those relationships that have been built up over 40 years give us a very unique position in order to help them out. Now we've been busy spending the time in the last few years really talking to them about customer centricity. And we've changed a lot of the culture and Safra will -- can touch on this or take questions on it. But we've transformed internally kind of how we help customers. And it's really about diving in, helping customers succeed. And if we do a great job with that, the financials will take care of themselves. So given those unique differentiators, how does that help us from an investor standpoint or a shareholder perspective to think about what the future holds. So the reality is our growth is being driven principally by our cloud. It's really helping accelerate our revenue around 2 different pillars, which is: one is, cloud is becoming a bigger portion of our overall revenue. So if you look back at FY '20, cloud was about 20% of our overall revenue portfolio. It's now expected this year to go over 30%. It's a big deal. The bigger that percentage gets, the more it's impacting our overall revenue growth because the other pillar of this is that our cloud growth is also accelerating itself. So if you go back and look at organic growth rate in FY '20 in the cloud, it was about 13%. And as we've talked about publicly, we see that growing more than 30% this year. So not only is that cloud portion growing fast, it's becoming a bigger portion, you can see how it starts to impact the overall revenue acceleration. So let me -- I'm going to spend the rest of my time drilling into why we believe we can continue to do this effectively, and it's around 3 different elements: one is growing our applications business through more and bigger transactions across not just horizontal but industry-based applications. And then in the infrastructure, same thing, more and bigger cloud infrastructure transactions, not just across the OCI platform, but including our past services like the database, including the MySQL HeatWave and other initiatives we have. And then finally, and let's not kid ourselves, Oracle will never forget about profitability. We are focused on continuing to scale our operating margins as we grow our business. So let me dive into this further. So let's start, again, I'm not going to spend too much time, but I just want to recap, industry base is very unique. You can look at these points up here, whether it's food and beverage or communications or hospitality, we are doing things uniquely with these customers that almost no other vendor can do. Larry talks a lot about health care. He did that earlier in the week. And this is really the -- an easy way to bring it all together. Whether you're in the hospital and you need another -- a test or you need another MRI or other equipment, we start with our procurement and supply chain capabilities in order to make sure the right goods are in the hospital at the right point in time, all the way through to the physician when they're meeting with patients and capturing clinical information and making sure that the patient is well taken care of and we secure the record. All the way through to extending how we can help a hospital through things like our life sciences applications so that hospitals can bring on test patients. so that their -- the people in their hospital can get access to new drugs and other innovations in order to help cure the problems they may have. All the way through to the back office, which includes, obviously, core financials, which we're great at, but through things like when do the nurses need to be there? When do the physicians need to be there? The complexity of the HCM space. Again, we're able to do all of that uniquely with a hospital. And when we do that, it drives out all -- it drives efficiencies in terms of the ability to serve their customers better, but it also drives efficiencies as well. And it's not us that have been recognizing how great we're doing or our customers but industry analysts, as you can see here in the last 2 years, have rated Oracle applications as the cloud leader 58x across our horizontal applications. And customers are voting with their feet. We now are over 45,000 customer count running Oracle Cloud applications with some of the best brands, as you see up there. Now I talked a little bit about that. This slide is a little harder to see on the right, but I'll walk you through it to highlight on the financial side. As I said, it's about more and bigger. So you see on the left, over the last 4 fiscal years, we've doubled the number of new and expansion transactions annually. On the right, it talks about that multi-pillar concept, which is something we really focus a lot on is we don't want to just sell ERP. We want to sell the cadre of the pillars across the suite. That's up 75% or almost 75% over the last 2 years. Now as you know, our Oracle Cloud applications are more mature because we're a lot earlier to the market than we were on the infrastructure side. And I think as you all know, relative to our $15 billion total ecosystem applications, cloud is now a majority of that revenue. And in fact, what's really growing that inside that cloud is that those strategic back office applications, including cloud -- Fusion ERP, Fusion HCM and NetSuite are up almost 3x the size from 5 years ago. That's really driving a lot of the growth. And now we're getting all the other applications, including things like the industry apps that are now being -- are continuing every quarter, more and more of them coming on to the cloud, and we're offering to customers and will help drive our growth. Now there still is a huge opportunity for us in the applications space. We still have a $5 billion installed base of on-premise support with our applications customers. We know through the yields we've experienced when we migrate a customer to our cloud that we see a 3x to 4x expansion in the dollars that they spend with Oracle when they buy subscriptions. So just in applications, we see in our own installed base, another $10 billion to $15 billion more of upside, not to count the huge SAP installed base that's just waiting for us to take it as we move forward. Let me move over to the infrastructure side. Again, a little bit more early, but as we like to talk about, we're not the legacy vendor in the infrastructure. We are the hot startup. Why is that the case? Because we built the second generation of infrastructure. In fact, I think we'd all argue AWS is now the legacy vendor. And we've come a long way. So in 2016, we had one public data center running 5 cloud services. That's how it all started. Today, we're now up to over 40 regions that have been deployed and another 9 that have been announced. This doesn't even cloud -- this doesn't even count the dedicated Cloud at Customer concept that we've talked about in the past as well as the opportunity with alloy. We think today now, we have the most expansive set of regional data centers available to our customers of any public cloud. And I talked about the services as well, going from 5 to now 105 cloud services. I mean this is an amazing amount of innovation in a very short period of time. And in fact, if you look at the type of workloads that we're now running, going from BareMetal as our first offering all the way through to the litany of different workloads that we're able to accommodate with our customers. So we've got a lot of diversity now going across our infrastructure. And again, that's helping us to go and win new transactions and get new revenue opportunities. And we're not the only ones that are recognizing it. I think as most people are fully aware of by now, when Gartner comes out with how they rank the infrastructure vendors in the most recent survey, our ability has now eclipsed Google, and we're well on our way to catching Azure and AWS. And as I said a little earlier, so there aren't quite as many customers, but 18,000 is not a bad number that are now running Oracle Cloud Infrastructure, including some -- again, some of the most amazing brands up here like FedEx and NVIDIA, Zoom, et cetera. So there's also that third leg of this amazing stool at Oracle, and that's called the Oracle Database. So we've got the great cloud, we've got the great infrastructure, and we've got the most amazing database. And again, I'm not going to belabor this because you had a lot of this discussed by Juan when he was up here who's our database expert, but again, the differentiations are, it's the most complete. It can handle any type of workload. And when we don't -- when something new comes out, we're busy getting it innovated and incorporated into that database, which, again, when you do that, no matter what happens, you always get the unique security, scalability, availability that comes with the Oracle Database. But it's also simple, and Juan was highlighting that as well. As more and more customers are adopting autonomous database, what you're finding is that our opportunity is not just to help our biggest customers run their database workloads on Oracle more easily, it's actually giving us an opportunity to go further down market. What used to some people might have said, "Gee, maybe it's too complex for me." It's actually the simplest database to use now when you think about it being self-securing, self-repairing, self-driving. And we're seeing great growth on that front. So over 200% improvement in our cloud database service revenue over the last couple of years. That's really being enabled by the fact that customers are now -- a majority of them upgraded to Oracle Database 19c. That's a key enabler for them to be able to take advantage of the autonomous features. But not only that, we're also offering it in the multi-cloud concept. Not just the database service with Azure, but we've talked about MySQL HeatWave for AWS, and I'm sure there will be more to come. So that now we have a couple of thousand customers running Oracle autonomous, that's been critical to get those references so that other customers see it, get the tangible results and the growth quickly comes behind it. So we're really excited about what's happening in the cloud database side. Now I kind of talked about this a little bit earlier. As I said, on the infrastructure side, we've got about a $23 billion ecosystem on the infrastructure, but only about 15% of that is coming from the cloud today. So huge opportunity to -- going forward to capture more revenue. And I will point out just one other little side fact, which is that if you include the services that Clay provides to our internal SaaS applications, that's another $1 billion of revenue that would otherwise be charged to an ISV. So there's a lot going on underneath there from a cloud standpoint. And let's look at that opportunity. So $14 billion of infrastructure support today. And when we look at our yields, when we take -- when we work with a customer who takes an Oracle on-premise database workload, moves it to the cloud, it's not just the database, it's not just the application, that's sitting on it, it's also the ecosystem of other applications that surround it that get moved with that. All of that moves up. We actually have a 4x to 5x uplift in dollars that we achieve as a result of those full transformations. When you turn that into value, that's about a $40 billion to $55 billion opportunity. So if you think about it, just within our installed base, if we can capture our applications and infrastructure, $50 billion becomes $100 billion. Doesn't even count all the other opportunities that are outside our ecosystem. So let me talk -- final piece is around scaling our business. So yes, no doubt that Oracle is laser-focused on operating margin contribution. So when we look at the incorporation of Cerner, so pro forma for that, it's about a 42% operating margin. That's nearly double the average of all of our closest peers. We run a much more efficient organization than almost anyone else out there, but we're never happy. We always want to do better. So what are the areas that we're focused on in order to improve our operating margins. So the first, let me talk about the cloud applications business. So as we've talked about, all of our cloud applications are moving and running an OCI. They're nearly complete. As we do that completion, we have a line of sight to over 5% of additional improvement to our cloud applications' gross margins. It's already a very significant number, but even then it can go higher. On the infrastructure side, which again has been a big CapEx investment, where we got to all these regional deployments that we've talked about, building all these hotels, if you will, all around the world. A lot of that's largely complete now. So that the incremental investments at this point is really building out the hotel room. Hotel rooms only get built when revenue comes. So as a result, as we deploy inside the data centers with the hardware, that gets deployed as customers show up. So it contributes quickly to gross margin, which, again, between these 2 things, as we look at our infrastructure gross margin, we have line of sight to over 20% uplift in our overall infrastructure gross margin. And the final thing is around operating efficiencies. So clearly, Cerner is a new and large acquisition. And trust me. I am getting called by Safra every day to ask how we're doing and driving operational efficiency there. We have a very large team focused on that. We think there's a tremendous opportunity as we move Cerner from being a services-led company to a product-led company to driving much higher margin, which will continue to get closer and closer to our overall operating margin contribution. And then finally, we're not satisfied with what we do internally ever. As I said, I'm busy as with myself and the rest of the internal team thinking about operational excellence. So we're continuing to find ways to drive out manual activities and increase automation, which means we can run this company even more efficiently. So that all helps with the bottom line. Speaking of the bottom line. This is the big slide. This is the big reveal, and I'm going to lead into Safra, but we'd like to tell you about what we see in the future. So if we look out to fiscal year 2026, we believe we can achieve the following: $65 billion in revenue on an organic basis, increasing our operating margin, including Cerner to 45% at a minimum. And all the while continuing to focus on what we've always done at Oracle, which is to grow our EPS in a double-digit annually. So with that as a setup, I'm going to turn it over to Safra.

I am still looking at those numbers. I think those are pretty good. Maybe we can do better. You never know. I don't think he changed that. Okay. More water. All right. So first, let me start by thanking you all for coming, okay? I hope that the show has been as worth it for you as it has been for me and for many of our customers. There is no question coming out of COVID, it was a question of if we have the show, will they come? And I think it is very, very clear that everyone is showing up. And the quality of the folks who have come here is so high. And the thing I had always hoped for in this show is that we would have such great products in every place that a customer who came to cloud world for ERP would look over here and see that we have industry applications or OCI or some new things in the database and make it all worthwhile. That is absolutely what is happening here. But the big, big shift about Oracle, and I'm not going to go through all the product announcements and all that because they are staggering actually, and I hope you see that. The big difference, and the thing we've been really working on is understanding our responsibility to our customers to have our customers as the center of our universe. And so instead of selling them stuff, our job is to actually partner with them to run their businesses. And for me, the best part of this show as I've run into customers in the elevator or at the coffee stand or wherever, is to hear from them sort of one at a time, how they really feel it's a new Oracle, and that level of trust is huge. We have invested billions actually in making sure we can help our customers be successful, whether they're bringing workloads into OCI or they're in the process of implementing any one of our products, in every single case, our involvement has been focused more and more about this long-term relationship and making sure they're successful. And I have to tell you, it was hard to even decide which customers to have on the stage with me. And I feel like I ran into so many and I met with so many customers afterwards and one by one, each one of them had an even more compelling story. I was sitting in a public sector roundtable and there was the city of Tampa. They had implemented ERP, HCM and SCM out of the box in 10 months, okay? Now boy, were they happy they had that when the hurricane was originally tracked to hit them, they, in some ways, got unbelievably lucky but they saved -- so this is from the CIO, I never heard the story. I don't even know if I'm allowed to tell you all. But nonetheless, I am because he was so happy they implemented so quickly. They saved so much money that the CFO of the city gave them permission to get more modules. I mean, imagine this is what's going on. And I'll tell you, he said it right after another state actually mentioned that it took them 18 months and they felt so good until they heard 10 months. So -- but that kind of thing is going on every single sector that we've really focused on those are -- it's becoming a roll-up in a way because we'll learn on Exelon and then we'll work with one of the other big utilities around the world. And they already -- we've learned so much and they've gone end-to-end Oracle, the next group wants to go end-to-end Oracle. And as you heard Jonathan talk about the banks, this is becoming -- we have built momentum. So it's not just HCM. It's financials. it's HCM and financials, and then it's the banking applications, the core banking applications where we're partnering with them to fit these products perfectly for them. So the big change for us, and I hope you see it because many of you have been coming for years. And of course, we used to sell a product -- I would always say, and you've all heard me say this before, our geniuses in their ivory tower, no offense guys, they would build a product and they would throw it out the window to our customer and lean out and say, "Give us a call if you need help, but we're hoping you're smart enough to use this." And then the SI and the customer would implement the products generally sometimes Oracle consulting. And that was the relationship until they came up with something new and threw it out the window again. I am only kidding, but -- not entirely. But now that's just not what it is. I mean we now have to basically move in with you, and we live in a townhouse with you and the customers are on this side and we're on this side, and they're connected and we build the software and the service and the system and our job is to make sure it works well for you. So we basically get rid of the wall between our 2 enterprises, us and you. And the nicest thing I heard from customers, the thing that actually made me smile, is when they said things like, "I cannot tell where my people stop and your people start." This is so powerful for us, this is so transformative for us that I have now heard this, whether it's in applications or at OCI, it is unbelievable because then they just continue to invest more. And every time they invest, by the way, they save so much more. We have companies and they're going to be just a mountain of additional announcements coming out after the show, where companies that have decided they are done with on-premise, and they're cool famous companies and they provide services that all of you use. And often, they're populated, their technical people are populated with Azure folks, AWS folks and GCP folks, and they give us a chance. Sometimes in my opinion, just because they're curious or they think maybe they could use us as negotiating leverage. Oh, boy, that's the greatest, okay? Because they come out of this and they're in shock and when they inform the other folks up in Seattle and [indiscernible]. So all those other folks that are up there, when they inform them that they're going with us, everyone is stunned. And that is what you're going to be seeing and that kind of stuff has been starting to show up. So I know we haven't met -- it's been like 3 years, right? Gosh. But I will tell you that even 3 years ago, I still felt like a cat with a little parrot feather sticking out of my mouth, thinking, I know something you guys don't believe yet, okay? But little by little, we told you this would happen. We told you that the cloud percentage of our business would grow. We told you that our own -- I mean it seemed almost impossible, right? I mean, we ourselves had shrunk and then all of a sudden, we not only grew but our growth rate has gone -- it continued to grow. And now it's almost -- it is unstoppable, I mean, unless I say something unbelievably foolish up here, it is basically unstoppable. And more and more of our customers, our goal has been try it, don't comment, don't do something superhuman, just try our stuff, see how it goes. We don't want to sell you everything upfront. And little by little customers have come in and said, "I need a bigger -- I want a bigger commitment because I'd like to get a slightly better price or I want to know what is in my future." But we didn't push that and now larger transactions, more cross pillar and up and down the stack. And this is just proliferating. And to be fair, you have to understand, we -- a lot of things have already been said by the time I get up here. So I'm going to let you ask questions, I promise. But oh gosh, not that fast. But I have 31 more seconds till questions. So the -- but the truth is that there is not a single one of our competitors, and they are all bigger than us, some of these hyperscalers. Every one of them has evidently an unlimited amount of money to spend and yet, we're the ones that innovated a footprint and a technical capability that not a single one of them has. In fact, recently, an agency of an allied nation went to us and went up north to visit the other folks. And we land a footprint with all services, which means we can land it anywhere in any undisclosed location you want with all services, not a crippled version, but we can land the full services. And when they went up north, you know what our competitors said? "That's impossible." When your competitors are saying what you do is impossible and you've done it, you should understand how dangerous a position they're in. It means they are in a -- it is impossible for them. We are so different. It is a generation 2 cloud and it has come. And I'll tell you that second mover advantage. We know a bunch of companies that were second mover. Google -- ever heard of them, they used to be big. The -- just kidding. Meta, second mover, remember the first ones? So second mover advantage. I think we're going to coin it here. So all right.

Okay. I will stop. They're waving at me. Any questions? Yes.

Hi, Safra. Phil Winslow, Credit Suisse. I really want to focus on Oracle's industry strategy, which really stood out to me during our conversations here at the cloud world. Obviously, as you mentioned, Oracle has a robust horizontal suite and many vertical-specific applications in addition to the platform and infrastructure layer. My question is, what is really the opportunity for Oracle to accelerate end-to-end automation from an industry perspective across this full enterprise stack relative to the competition? I mean, for example, there was a reference to -- industry reference architectures made earlier, bundles, potentially telco cloud, et cetera. How should we think about this?

It is becoming -- it's almost an unfair fight, okay? Because think about who's number 2, like who's got almost as much as we have? I honestly, I don't even know how to answer that. There's our legacy competitor at SAP, does not have any of these industry applications. Our hyperscaler friends do not have anything, let alone what we bring to the party. The opportunity is such that we've seen countless other times. If you prove it with big names, everybody goes, "She did that, I'll do that." One of the biggest banks in the world is doing not only Fusion, a complete finance transformation, but all the banking stuff, and they are not alone. And that's what happens. All the banks before you know it, it's all the retailers before you know it, it's the health care situation, you can imagine what an unfair fight that is now because this is incredible. The ability to save huge amounts of money for these enterprises is so dramatic. I mean they will save, in most cases, at least 90% from what they're doing now. It's stunning. I'd like to have a little quiz here. Do you -- how many of you believe that implementing one of Cerner's competitors at a hospital system could possibly cost $1 billion? You should -- all your hands should be up, okay? Can you imagine all they're putting in is an electronic health record and some billing in these poor hospitals, and there are many of them, spending $1 billion implementing. Now I know $1 billion is not a lot of money to you guys, but to me and to hospitals, I got to figure it's a lot of money. And yet, I'd be perfectly happy taking $100 million, okay? And feel like I have just hit the jackpot. I mean these kinds -- and remember, some of those $1 billion SAP implementations, do you remember some of those $1 billion SAP implementations that were then thrown into the garbage? Yes. Again, this is a whole new world. These folks are starting to toss SAP even in Germany, I mean, where it's a matter of national pride. So I have to tell you, this roll up, once the momentum, it is, Katie, bar the door! You just got to lean back and let it happen in front of you. And that, by the way, is one of the things we were seeing here at OpenWorld. And I call it OpenWorld, I can't help myself. But I will tell you, in all our marketing people are probably terrified what I say next. But you know how we call it cloud world, but actually with multi-cloud open, and with alloy and with what Steve Miranda's team did, actually open is even more correct. Because, once again, when you focus on the customer, you deploy any way they want, if the cloud a customer, DRCC, public cloud, all the different options, again, and connected to anything you want, I think Open World still applies. More on that later. Okay. Sorry, Jason.

Kirk Materne with Evercore. On your keynote on Tuesday, it was pretty evident that your message was to a lot of your customers that standing still is now dangerous to a certain degree. And I think we all are watching the economic backdrop. But that seems to be resonating in sort of your performance and the discussions, I think all of us have had with your clients of this or your partners at this event. Can you just talk about what's changed on that front from an executive perspective when you talk to them about? It used to be an economic headwinds coming, we should kind of pull back. It seems very much -- maybe it's the right time from a product perspective and an industry perspective. I was just kind of curious how confident you are that the, I guess, the momentum you have right now can continue really because of that dynamic?

So you know how I just told you like how do you feel like saving 90%? It's pretty compelling. I mean it's not a little bit of a saving. So many folks, they already know, look, some folks barely got through the epidemic with their shirts on. It was pretty rough for some of them. They could not really adjust well, some didn't make it all the way through. Those that did realize the limitations of their systems. They did not have digital connections at all with their customers, with their employees, with their suppliers. I mean it was pretty hairy. I was meeting with a hospital system, they implemented HCM in the cloud during the epidemic because they could not otherwise staff the hospital. And let alone the hospital, half of these folks were in tents outside the hospital. So let alone -- so everybody realized they needed much better understanding of -- and a digital connection with everything that matters. And I mean this supply chain Armageddon we just lived through. I mean I feel like I personally begged every component supplier for stuff, okay? And luckily for us, they were really very kind with us, and they also saw our volumes. There are suppliers of ours where we went from $100 million to $300 million, but there are others where we went from $1 billion to $3 billion with them. So this is another -- almost every company had a supply situation, and they can no longer do it on those old systems. They cannot forecast anymore. They have to understand their inventories better. They have to make their investment decisions. They cannot go through another massive shock like the epidemic without -- or pandemic, I guess, without moving into the 21st century. Most of these systems were put in for Y2K. Yes, they were upgraded every few years, but they're 20th century systems. We are 22, almost 23 years into the 21st century, and they're just going to do it. Plus they just frankly need to save the money. They cannot run these old systems. They're exorbitantly expensive and they're unbelievably tired of being data center managers and all of that. They have no economies of scale. When you are your only customer, you just can't beat the cost leader.

Mark Murphy with JPMorgan. Safra, how wide do you want to open the aperture of OCI. Do you want to go from 105 services to thousands? Do you want to be able to handle any workload, anything any developer can dream up or would you prefer to have the focus really be on these Oracle workloads and the streaming use cases like Zoom and TikTok?

Oh, no. Well, first of all, Oracle workloads are great. We love Oracle workloads. We crush it in Oracle workloads. That's not even like first or second. It's like first and 10 the next -- okay. So Oracle workloads, of course. And it's interesting because when Gartner does their analysis of capabilities, they grade almost based on what Amazon has because it's what there was. But they don't include some of the things we do unbelievably well, which are very large databases and things like that. So I think the report card is going to change, by the way. Do we want to do everything? Well, actually, in many ways, we have the ability to do anything because we have BareMetal. We have all of these different levels of capabilities. And if something is important, we will do it. And we give this incredible flexibility because we have this massive price performance advantage even on base compute, okay? When you're killing them and you have a price performance advantage because all your stuff is new and designed in an unbelievably compact and perform at way, which you know where lunatics on security and performance, we're -- that's our thing. The fact that we are beating them that you can bring your workload from one of the other guys who is so much bigger than us and save half the money. And depending on your egress, ingress fees that they're charging you poor thing, then -- I mean, we absolutely -- it's a no-brainer. This thing becomes an IQ test. So are we going to have every imaginable service, where we're going to have the capability for every imaginable service. But if no one is using it, if just a few developers, hey, we have all of these other things they can just put whatever they like on top of it, and that's up to them.

That is Keith Weiss from Morgan Stanley. Safra, thanks for hosting us today. It's been a great conference.

I made all the sandwiches too. How were they? Okay. I didn't.

The cookies were delicious. So the question I had is I've been to a lot of Oracle Analyst Days. I don't ever remember seeing a long-term target from you guys. And it was a really impressive long-term target. I don't think $65 billion was in many people's models. Two questions for you. One, why was this the right time to be putting forth that long-term target? What gives you confidence now to sort of look that far forward. And then two, the $65 billion, is that organically? Or are there going to be more kind of [indiscernible]

No, that is our organic number. That's assuming what we own now, okay? So that's assuming what we own now, okay? So honestly, it's not that aggressive a number because of our growth rates. I know that many of you are having kind of like a hard time to believe like remember those guys, those dinosaurs, they might have crossed the chasm. The bunnies are running, okay? You've heard me say that before. I told you a while ago, last time we came. When those dinosaurs cross the chasm, you don't want to be one of those fluffy things, you're lunch. And you see like with the database, what we're doing, I would not want to be -- I just would not want to be hopping around in front of us right now. We are -- we see our own numbers, we know our own contract base. They're going to be customers, individual customers that will pay us $1 billion a year, okay? Now you don't need a lot of those. You just don't need that many. And then there will be thousands and thousands of other customers who pay us $10,000 and $100,000 and $1 million. And you know what, $1 million here, $1 billion there before you know it, it's real money, and it adds to $65 billion pretty easily. So -- and we thought we should reward you. You missed us, didn't you? We missed you.

It's John DiFucci from Guggenheim. Your -- one of the questions I think we all get it, and it's great to see those revenue numbers, but the profit line, which I know is near and dear to you. But your public cloud brethren when they started approaching building out their public clouds, they sort of did it as a field of dreams, sort of build it and they will come. And sometimes, maybe a year or even years ahead of time, they were investing a lot of money. And to their credit, it came, and they did really well. But over the past few years, you and Larry have talked about how Oracle is different in that respect. And how -- listen, when we were spending, it's right on the eve of it coming. I guess to help us a little bit to think a little bit more about the profit line or at least on the gross profit side. Can you give us a little more on the timing? Like we were hearing a lot about big deals that are being signed and that's really exciting. But is it -- do you expect those deals to ramp up to sort of full capacity over I think it will take a year, 1.5 years. I know this is going to be different, but maybe even in because we're a little Excel jockeys kind of and maybe sort of like an average-ish kind of thing, maybe.

So it really depends what it is and who it is and what their commitment levels are. But again, it is both large deals and it's like raining on us. okay? What's happened, for example, is -- and remember, it's not just like here in the United States. It's globally. I mean, we basically buzzed right through data centers in Japan, just built them and they filled so fast. Built them, and they filled so fast, Brazil. Built them, and they filled so fast, Israel. Saudi Arabia, I mean, we are in countries and places where our competitors do not have anything, okay? We are 45% of the market in some Middle East countries. And how is that? Our competitors do not even have sites there. The only other folks around would be from another nation. And so all of their -- the workload they want for an American company is us. So what happens is we are running a portfolio of centers. We put a lot of -- that's 40 in just a few years, and then we've got 12 more. A lot of our government sites have only recently been certified. And so they sit ready. Now just to understand, there's a lot of cost in the original prep time, but then we fill them up with computers and then it's sort of everything else is free. The computers in many ways are the cheapest part of the entire operation. There's all of the start-up costs of each one of these. We expect significant gross margin improvement in IS this year. So this year and then into next year. You're going to see improvement because we are going to be benefiting from the economies of scale and as more and more of these centers fill and then are expanded. The expansion is not expensive as a general matter. So it's going to be very profitable. The other thing, by the way, which you don't totally see is that all of our SaaS sort of all the IS, we had to build out to move our SaaS and our GBUs, our industry business unit technologies into those data centers, they get it, and it's all included. So sometimes, you will see it as our SaaS margin, but really it's partially -- our IS margin, it's not contributed into that line because it's all included. So over time, I think you're going to see our cloud margin, gross margin continue to improve significantly. Yes?

Okay. Safra. Mark Moerdler, Bernstein. Congratulations on the FY '26 guidance. Very impressive, especially considering everyone stepping back on their numbers and getting concerned and worried and all the rest. I'd like to unpack the route to 45% pro forma operating margins for FY '26, given the fact of this move mix shift to cloud, especially OCI Gen2. Can you give us any color on how you get there? What -- obviously, everything is going to drive it, but what are the bigger drivers that's going to help you get there?

So there are a few, what I would consider low-hanging fruit, Doug alluded to them. The situation at Cerner, that is just not how we run a place, okay? There's just nothing about how they operate. They're a great company, great people. You know us, we throw around nickels like manhole covers, okay? It is not every single way we spend and the way we run an operation. We simplify everything. We automate everything. You all know that. I mean I'm sure you -- I've ruined many a afternoon when in September when I've announced earnings a week and a couple of days after we've closed the quarter. Now you have to understand when you do -- and we just did it, we could have announced -- oh, now I get a chance to ask a question here. So we closed our August quarter, and we were ready to announce on the 8th. It was a Friday. Would any of you have liked us to announce on a Friday afternoon? No, I see a lot of no. Okay. So we had to wait. We were ready the 8th. And because of all of you, how about Saturday, the 9th, that would have been a bad day, too, right? Yes, it's also -- people are at temple. And then Sunday, some of you are at church, so you don't want to do. Okay. So I had to wait till the 11th to announce our results, okay? Now this is, by the way, in the same quarter that we bought a brand-new company that does $6 billion a year in revenue, right? So we -- so we had to announce the 11th, I'm pretty ashamed, but I blame you. So the reality is when you ask, how do I spend less? Yes, because we do that to them. If we just clean Cerner up -- I mean, listen, Doug is a smart guy. When he throws the number up like that, he's thinking we can beat that number. We should be able to. Now I've just upped the ante. But it's not hard. Remember, when I started at Oracle, we had 21% operating margins. I know some of you were in high school, but that was the number. And the very first year, we went to 34% operating margins. The first year I got there. okay? I know that seems like terrible margins, but that pretty much beats all the rest of the industry even today. Now we're pretty shamed of our 42% operating margins that were up there. We're not going to let that [indiscernible]. It's just no way to run a business. By the way, spending money and getting nothing for it just slows you down. It's like empty calories. Bad idea. I know, don't tell me. But we're going to get ourselves in line. And I don't actually think that's going to be the hard part. And as -- and the bigger piece of this, by the way, is the massive economies of scale that you get. First of all, I don't know why those other cloud guys can't figure out how to make money, honestly. I'm bewildered by it because once your customer is in and they expand and expand and expand, you have such massive economies of scale. There is no reason why the profit does go right to the bottom line. And as customers are expanding and you have very little cost of sales associated with it and very little engineering, additional field engineering associated with it, you become extremely profitable. It is almost unstoppable. And every year, you're bigger and bigger and bigger, I'm convinced we are going to -- it's obvious, we're going to be able to be much more profitable and meet our long-term goals. Any other questions? My boss is here. Okay. Now to the owner of Oracle, the largest shareholder, Larry Ellison.

Hi, everybody. Whatever you want to talk about. Okay. That was fantastic. I'm going to London. Actually, it's true. I had a meeting with the Prime Minister, but I didn't get there soon enough. We're meeting with the NHS actually and the Prime Minister, but again, they don't have one. And well, I certainly don't want that job [indiscernible] All right. That's the end of the comedy routine, gentlemen, right here.

Brad Zelnick with Deutsche Bank. Thanks so much for spending the time with us and for hosting a phenomenal CloudWorld. I'm confused because I heard you referred to using its older open world term earlier today. But...

Well, we really wanted to call it open multi-cloud world. But -- it turns out they wanted to charge us way more for this signage. So we went with CloudWorld.

But I think -- it feels like there's a lot that's changing at Oracle. Fantastic numbers that we saw put up. The growth is accelerating. Even the color scheme changes this year. I'm hoping it changes back next year.

That was -- the color scheme is huge. By the way, I mean, Safra is really focused on margins, and so we went with the color scheme. And we're going to have a huge difference that's going to really accelerate our margins.

My question, Larry, we see all this change. I'd be curious from your perspective, what is it that's changing inside of Oracle that maybe we don't see? You're 45 years old now as a company. And as we think about positioning yourselves for the next 45 years, how do we think about the culture evolving and what Oracle will ultimately become?

Such an interesting question, and I really have, I think, a very interesting answer. The acquisition of Cerner. I mean obviously, it was, if you will, the final step in getting all the resources in position to make a real serious effort to automate the entire health care ecosystem, not just providers, which Cerner has been focused on in their history. Cerner and Epic compete to automate big providers. And we've got to continue to automate and actually improve the quality of automation in big providers. But ultimately, we wanted to go after not just providers but also payers, whether they are in the U.K., the payers, the government in the United States, the payers, often an insurance company, sometimes the government when it comes to the VA or DoD. It's a combination. We want to automate the relationship between the providers who have to get approval to have the payers pay for a particular operation or a new complex expensive immunotherapy drug. We want to automate that interaction that goes on. We want to make it easier for providers to buy pharmaceuticals and medical equipment. It should be as easy to buy that stuff as it is to buy from Amazon.com, right? There should be an e-commerce site. There's incredible complexity in dealing with the inventory in big hospitals. The inventory isn't in one place. It's distributed on nurse stations, in operating rooms, in ER triage centers. It's all over the place. It's just finding that stuff. So you want to -- you need to automate inventory. The workforce is enormously complex. A lot of the doctors and nurses and pharmacists don't work for the hospital or they work for multiple hospitals plus they have their own offices and recruiting and scheduling and managing that workforce is enormously complex. So we're trying to tackle the whole thing. We're trying to tackle the whole thing. And that's become not just a job because it's health care, it's a mission. Okay. So your question was about culture. As we go after the largest vertical segment, the largest industry, if you will, on earth, this multitrillion dollar industry is called health care. It's not just about making money. It's about doing the right thing, being more efficient, I mean, saving lives, it's about saving lives. And that is fundamentally the fact this quest, this new mission that Oracle has adopted, has fundamentally transformed the culture at Oracle. I think the people at Oracle are enormously proud that we're taking on this huge challenge because who hasn't lost a family member to some kind of health tragedy. We need better systems. We need better tools to give our caregivers so they can do a better job and better job is keeping people out of the hospital and extending life and improving the quality of life. So now when we're out recruiting first-class engineers who are maybe in the middle of their career where they've already made a lot of money at Google or whatever, Apple or one of these great companies. And they're interested in finding purpose in their lives, not just making more money. They like -- sure, they'd like to make more money. But I mean, what are they doing? What are they doing to make the world a better place than the world they found when they first went into the workforce. So we're able to recruit against anyone right now. We're able to hire most of the people we want, engineers. Our engineers are really committed to this mission. They are working harder, recruiting more of their friends, taking more pride because what we're doing is really important. And I think that's fundamentally changed the culture at Oracle. It will also have huge impact to our brand, if you will. We've never been a consumer company. We sell technology to businesses. We sell to JPMorgan Chase and we sell -- we sell to the HSBC Bank, and we sell to large car companies and large [indiscernible] the other tech companies, retailer -- the largest retailers in the world, we really have been a B2B company. We don't sell to consumers. We still don't exactly sell to consumers. We sell, if you will, or provide services to patients through the health care providers in our new patient engagement system ready through our health care system. So Oracle, which has been a bit of a hidden brand throughout the first 45 years of the company, is now going to be at the center of the next generation of health care. And the next generation of health care systems, the systems make direct contact with all of the patients and that the -- what we call a patient engagement system is what makes it easy for patients to interact and communicate with and share information with their caregivers, their doctors, their et cetera. So people are going to be carrying around Oracle in their pockets. And it's not iTunes, it saved 1,000 songs in your pocket way back in the day when it was only 1,000 songs when he first -- when he came out with the first iPod, when he went back to Apple. But now your interface to your caregivers is going to be through an Oracle smartphone application. Your longitudinal health record will be available to you. You, the patient will be controlling access to your health records and sharing it with doctors, but doing it electronically on a smartphone. So it changes the culture and the employee -- it changes our ability to recruit the very best computer scientists to work on this project. It changes the overall awareness of the company. So this -- again, this new mission in health care is transformative to Oracle as transformative to Oracle's culture, it's transformative to Oracle's brand, and I think, transformative to Oracle's business. Yes. I [indiscernible] people not in the first row very soon.

Kash Rangan from Goldman Sachs. I have great memories of, I think, the 1998 Analyst Day when you were in the same kind of black...

No difference at all. I'm just trying to save money. This is the same sweater. I have one of these black V-Neck and if it's Analyst Day, it just says it's a little [indiscernible] Analyst Day.

But the difference is you didn't have [indiscernible] great, great memories and you were really funny as you are right now. So I wanted to just ask your thoughts on OCI Gen2. Oracle achieved demigod status in databases for cracking the code that happened in the mid- to late '90s. Is there something like that with infrastructure when at cracking the code? Or is it more like a cat and mouse game? It's the Amazon Web Services, Microsoft and you guys going back at each other. What does it take for you to achieve a level of semi-god status in this infrastructure world as opposed to databases?

Well, I think there -- there are multiple things. The -- we just announced Oracle version of MySQL is running on Amazon right now. So -- and when we announced it a while ago, actually, when we first [indiscernible] Oracle, MySQL HeatWave. We announced it is the fastest version of MySQL around, and it's 10 to 100x faster than everyone else's version of MySQL, including Amazon Aurora. And we published our benchmarks on GitHub and all the data on GitHub, who so -- whoever wanted to reproduce the results could go ahead and just simply run it off on GitHub. It's very easy to reproduce the results. And that, of course, is the [indiscernible] aspect of the scientific method is reproducible results. Okay. Okay. Try Aurora, try MySQL HeatWave. You don't have to change your program at all, just press this button, price that button and see who wins. Amazon's comment was no comment. That was how they responded to that. No comment, by the way, which was the best comment they could have made because we run -- otherwise, they could have said, yes, they run 10 to 100 times faster. And that's what the results clearly show. So I don't think Amazon was the first mover in infrastructure. We were the first mover in applications. In fact, the very first -- so let's give them credit. I mean, the AWS started the infrastructure business. But the cloud is made up of 2, if you will, pretty different businesses. There is the infrastructure business where you have Amazon, AWS, Azure, Google and us, kind of the big 4 in the United States on infrastructure. And then there are a number of companies that are -- do applications in the cloud, which include us and Salesforce and Workday and Shopify and ServiceNow and there are a lot of them. Well, the very first cloud company on Earth, the first, it was NetSuite and that I started with Evan Goldberg way back in the day. So we were -- we had the kind of the first-mover advantage in applications. They had the first-mover advantage in infrastructure. First-mover advantage is important. But we didn't have the first-mover advantage way back in database days. IBM did. And so how do we ultimately beat IBM. We were faster and cheaper and more secure and more reliable. So there's no magic in this. I mean we have to be faster and cheaper and more secure and more reliable. And we think we've done that. I mean our cloud, I'll just take a couple of seconds to describe. Our cloud is fundamentally different than the other 3 infrastructure clouds. Let's just focus on infrastructure because I think we're on our way to clearly being the largest application provider in the cloud. I don't -- I think it's us or Salesforce right now. Take your pick. It depends how you categorize Salesforce's revenue is you've got to split their application revenue with some of their other revenue. But -- we're around the same size in applications in the cloud, close enough. But then there's no one close to us. After those 2 companies, there's no one close. And they do very well in the front office sales force. We do -- we dominate ERP in the back office. But anyway, we're well established in applications. There's no doubt about that. I mean our market share in cloud ERP is mid-90s higher, something like that. So the big question about Oracle, how is Oracle going to do in infrastructure? Well, infrastructure, we've got to be faster, more secure and more reliable. So when we were doing our infrastructure cloud, I actually canceled it. I canceled the project. We came -- it was a pretty kind of big disagreement between me and the powers that be at Oracle. I thought we were just copying what the other guys were doing, which I thought was a really bad idea. And I wanted to start over and do this Gen2 cloud. And what I mean by starting over, I didn't want to use the same hardware everyone used. I wanted to use fundamentally different hardware because if you don't want to use Intel and AMD hardware, were you crazy? No, no, it's going to have Intel and AMD microprocessors in it. But I wanted to have -- I wanted all the machines that we "rent" in the cloud to have a separate microprocessor and a separate memory. So they had to build at least 2 micro -- a minimum of 2. And one, all the Oracle code will be in this one secure microprocessor that our customers could never get at. And when we rented the computer to the customer, they were in their own, they would be using the AMD or Intel microprocessor. They have their own memory, and they got the entire computer. That's not the way any of the other clouds work. None of the clouds work that way. All of our computers in our cloud work that way. The cloud software or in these control computers and the infrastructure that we rent, you get 100% up. We don't -- so our code is not in the same memory as your code, if you're a customer. We can't see what you're doing. You can't see what we're doing. We use this to create virtual networks that literally isolate all the computers that you're renting from the network. No one else can even route a message to your computer. And no one can hack our computers unless it's an inside job, no one can hack our computers, our computers, our control computers are on the internet. There's no way to get at them without the Internet. On the public Internet, a private Internet, they just can't get at our control computers. So it's inherently a much more secure architecture than the other cloud guys have. And we think that's become a bigger and bigger deal. We also just are much faster and much less expensive to use than other people. So I think you'll see very large brands. I mentioned this in the last call, very large brands moving off of AWS and on to the -- into the Oracle Cloud. Why would the -- and I think the easiest ones to sell are the largest guys. They're biggest customers. Well, that seems odd. Well, why would they're Amazon's biggest customers, be their most vulnerable customers. Well, they are the ones that are spending the most money with Amazon. And if we can cut that bill in half, it's real money. So we can give you better performance, much better security and at a dramatically lower cost. So it's worth making the move, especially now that the unicorns aren't worth quite as much as they used to be worth. And for the first time, as long as I can remember, you guys actually think these technology companies should make a profit. I mean I'm shocked that I'm standing -- I'm not standing. Actually, I'm sitting, I don't know. Here I am saying, what, you guys think it's important to make money? I had no idea. I think Marc Benioff has done an amazing job with Salesforce. But they make a little bit of money, right? Not a lot of money, but they make a little bit of money. But Marc, obviously, is -- was no longer fashionable because losing vast amount of money seemed to be the way to go. If you really want a big valuation totally just spend as much money as you could to grow as fast as you possibly can because profits just aren't considered. I mean ultimately, you think, well, if you're growing really fast, eventually, you'll make a huge amount of money. I mean Snowflake is very interesting that they have to run their self, they have to pay AWS, and they have to pay Google and they have to pay Microsoft and they're getting -- they're small, but they're getting decent growth. But they -- the economics of that business is really tricky. I know that because we have MySQL, we have MySQL HeatWave running on AWS, and I know much [indiscernible]. So all of a sudden, profitability matters to these -- some of these unicorns and they look at their AWS bill and they say, well, gee, I mean, they come over to Oracle and they try it. They try it. And one thing I don't like is the conversation I invariably have with a CEO who said, my guys didn't even want to try Oracle. I mean we want to -- we're going to try -- we wanted to leave AWS, we're going to try Azure, and we're going to try Google. And they didn't want to try Oracle, but yes, we finally said, yes, we're going to try Oracle". And then you guys were way better than anybody else, way better meaning much faster and much cheaper. And I think -- and frankly, Larry, I'm very impressed, but -- why do you keep it a secret. Why is that your marketing strategy? We don't really understand. And it has been a very well-kept secret, but the secret is out. We've got some very big customers that are either -- have either moved or are in the process of moving. We announced NVIDIA, we have a whole -- we have a large number, and we'll have some very interesting announcements coming down the road. Ultimately, Oracle outperformed, the Oracle Database dramatically outperformed, the Microsoft database and the IBM database, and we became utterly dominant in database because we were faster and cheaper and more reliable. If we can be faster and cheaper and more reliable in the cloud? And if profits matter, profits don't matter, who cares, but if profits matter, security does matter and always and reliability always does matter. We have a chance to grow our business very, very rapidly in the cloud by grabbing some of these customers. And it's happening. And we have got -- so your question, how -- how do we do it? The same way we did it last time. We built -- you got to build a better mousetrap. You don't have to be first, but you have to have the best price performance. And you have to be highly reliable. And these days, you have to be very secure. The cyber warfare that's going on right now, is we don't publicize it. It's kept a secret. When hospitals taken hostage or someone else has taken hostage for ransomware, we don't -- it's like kidnapping. We don't -- it doesn't make the news, but there is a lot of it. And there's a lot of it that occurs in some clouds and none of it occurs in our cloud. So we think if we can -- we actually thought about maybe we should go in the ransomware insurance business, and I'm not just kidding. It's like Tesla should go in the car insurance business, right? So the -- if you have self-driving, if you got self-driving working and you're using self-driving or you simply know all the driving characteristics of the people who drive your cars, you can get the rates right where no one else can. So -- we think the opportunity is enormous for us. We think we're already exploiting that opportunity and applications in a very big way. And that's growing very rapidly and growing very nicely but we think in infrastructure. infrastructure is now growing much faster than our applications business. So we think we have a chance to invite both sides of that apple in the cloud. Applications already on our way. Infrastructure looking incredibly promising. And again, it is now over a $4 billion business, again, it's much smaller than AWS, but we're growing much faster.

Karl Keirstead at UBS. Larry, Jeff Bezos and others are warning that we could have a recessionary environment next year, get ready. What are your views? And what are you and Safra are doing to get Oracle ready from an internal organization pricing if we have an economic downturn next year?

Yes. Well, I think the -- I think everyone is handicapping it. It's way more than 50-50. We're going to have a big recession, right? So I don't think there's any doubt about it. So we just went through relatively recently our budgeting and I think we're very well prepared if there is a recession. I think we've taken some measures already. I hope we don't -- I don't know -- I don't think we'll have to take additional measures. We have very high, and Safra's pointed out, we have very high margins. I don't think we'll have to take additional measures, but we've taken some measures already. We are being cautious at the same time, we are taking on new big customers, which will require us to make some certain capital spending, but only once those customers show up. So yes, I mean, we would be foolish if we didn't -- if we weren't very aware and very careful and very thoughtful about going into next calendar year, we would like to -- we think we are judged by our top line growth, of course, but also by that we've never sacrificed profits to get the last dime of growth -- of top line growth. We've never done that. We've tried -- we've tried to be very balanced in terms of we're growing revenue and we're growing profits in simultaneously. We're going to grow our business, but we're not going to sacrifice profits to do it. We don't -- that's not what our particular shareholders have ever wanted us to do. And I don't think it's a very good idea. We think in a structural situation, we think we have some basic advantages. The fact that we've got the lowest priced cloud, we think is a big advantage in a recession. We think as people are under economic stress and they want to lower their cloud bills, you don't leave Oracle, you come to Oracle to lower your cloud bills. So we think we're in pretty good shape for the recession. But one knows how deep this recession is going to be. I mean, there's a war in Central Europe. What the hell? Who would have guessed? I'll never -- the Barack Obama/Mitt Romney debate where -- both -- they were both candidates at the time, one won, one lost. And they were asked, what's the biggest threat to America. And Mitt Romney said it was the former Soviet Union Russia. And he was ridiculed for that answer. Well, I mean, maybe they're not the biggest threat, but they are one hell of a big threat. I mean who can believe there's a shooting war going on right in the heart of Europe. Who can believe that Europe has got inflation. I mean our inflation is very bad, but it's still single digits. There's -- I mean, the energy prices in Germany have more than tripled. U.K.'s inflation is over 10%. And I know I'm -- and they're turning over Prime Ministers like some other countries. You don't think of U.K. is turning over Prime Ministers at that rate. So there are some very unusual things going on. So we're being very cautious and prudent. At the same time, we think we're in a position to grow our businesses even in difficult times. But again, we're watching things very closely. We'd be foolish not to.

It's John DiFucci from Guggenheim. I appreciate your comments about the technical differentiation of Oracle or OCI versus your peers. You talked and others have talked about sort of like just-in-time build out of your cloud when you build when it's needed versus sort of the field of dreams of your tiers that build it with the hope of [indiscernible]. But can you talk to us a little bit about the technology? Like that's something I don't understand why you can do that and the others have had a hard time. .

Okay. Yes. No, I mean one word, autonomy, same word Tesla would use in terms of software. Our strategy, our cloud strategy is fundamentally different than our competitors and to all of our competitors, all of our competitors' clouds kind of look like except our's very different. We have -- we have 2 computers. We have our control software, not sitting in that AMD processor, not sitting in that Intel processor. . So we've segmented that that's one of the things we've done. So the other is we can bring out a cloud. Well, let me go back. Their strategy is to build very, very large data centers, some number of very, very large data centers. I would say their overall strategy is build dozens and dozens of large data centers all over the world. That is not our strategy. Our strategy is to build hundreds of data centers all over the world that aren't quite as large. But we want to have a data center basically in every major city on earth or 2 data centers in every major city on earth. Why is it a radically different strategy? Well, we think it's much more efficient to have -- we think the data center should be close to the consumers. And this is especially important, by the way, for certain kinds of simulations and gaming and video streaming, all of that. It's just much more economical. When the data isn't traveling so far in the network. So it's a much better model. If a data center, God forbid, should go down, our's really don't go -- barely go down. There was a case where -- we lost a data center, but we're [ fully tolerant ]. So another data center immediately took cover. But the blast radius is smaller. But our approach is to build. It's not like Tesla StarLink, a large number -- very, very large numbers of small satellites rather than a few large communication satellites. And our approach, again, hundreds maybe 1,000 data centers all over the world, but in order of magnitude more than our competitors. And we already have, I think, more data centers than any of our competitors. So I mean AWS is way bigger than we are, but we have more data centers than AWS. A, Why are you doing -- why are we doing that? I mentioned the more -- as you spread out the data centers, the economics get better because the network uses goes down because the data is closer to the consumers of the data. The network runs are smaller. If the data center is lost, the blast radius is less. How do you manage 1,000 data centers. How do you bring up 1,000 data centers. How does Tesla manage all those satellites? What is Tesla done that's really amazing -- not Tesla, SpaceX. What's SpaceX done that's really amazing about StarLink. They did what none of the other satellite guys could do. They can manage thousands of satellites because the software they have that manages the satellites work on thousands of -- scalable, it works on thousands of satellites. The software we have in our cloud allows us to autonomously bring up a new data center. We just ship in the hardware, turn it on and it pretty much comes up on its own. All of our data centers are identical, not in size, but identical and software based. We're the only cloud company that every one of our services is in every one of our data centers. That's not true of AWS. AWS has service a in this data center, not in that data center. If you want to get this, you got to go to this data center, not that data center. The data centers have differences. We think that's a terrible idea. iPhones don't have differences, data centers shouldn't have differences. They should be the same. The -- it's much more reliable when they're all the same. You test them and you just roll out another one and another one and another one. The rollout is completely autonomous. The running of the data center is autonomous as you can make it. So we build -- we're spending a lot of time our database, our signature foundation product, the Oracle database is autonomous. What does that mean? What does that mean? Well, why are we so focused on autonomous software? Why are we using AI to automate our data centers and automate our software? I thought you used AI to help recommend the next retail purchase for some guy on an e-commerce website. And that's at the -- you use that for AI or we're helping a doc diagnose a malady. You use AI for that also. We're a huge internal consumer of AI. We made the Oracle database, our, if you will, the foundation upon which most of our other technology is built, including our cloud, by the way. All the persistent storage or virtually all the persistent storage in our cloud is that the Oracle Autonomous Database, not an old version of Oracle, but the Oracle autonomous database, a database that updates itself, if it breaks it heals itself or repairs itself, it fails over automatically. There are no DBAs, There's no -- all the performance tuning is done automatically. There's no human intervention. There are no human beings involved. And we did that for 2 reasons, autonomy. One, it saves a lot of money and human beings actually they expect to get paid and expect benefits and insurance and all the stuff, days off. Autonomous software, no days off, no benefits, none of that stuff. So the -- but even more important than saving a lot of money with autonomy is they don't crash the car nearly as often as human drivers crash the cars. So our autonomous database doesn't make errors, virtually -- got it. I want to go trouble. There's a big famous bank that ran on AWS -- that still runs on AWS that lost all their credit card data on AWS. And I made a big deal about it a couple of years ago. And what happened was they misconfigured their software, they, the customer, the bank misconfigured its software on AWS. And therefore, they lost all that credit card data. Now what does it mean the bank misconfigured the software is well, some guy working for the bank made a mistake configuring the software at AWS, and they left a. -- they created a security vulnerability, and they got hacked and they lost all their credit card data. Well, the great thing about the Oracle Autonomous Database, there's no guy that configures anything. You cannot make a -- there's no human labor, no human error, no pilot error. So the only way to make our software more secure, we have to continuously take out labor. It also makes it more economically efficient at the same time. It also allows us to go from a strategy of a reliclly small number of really big data centers that are all kind of custom with a lot of labor to bring up the data center and a lot of labor to run the data center, to know, these are autonomous data centers and they're scattered all over the world. They should be in every big city, and we should have 1,000 of them by the time we're done and that will give us overall a giganic economic advantage over our cloud competitors. It will be in every country, will be in every country. We'll be in Ghana, we'll be in Ivory Coast, will be in -- well, Indonesia is a very big country. It will be in small countries, in Asia, in small countries in Europe, it will be in every country. It will be in every city. Data sovereignty is important to you, and I believe me, data sovereign is very important to nation states. Health care records, for example, but other things as well. They are defense intelligence data. They don't want to -- they don't want to run in another country. I don't think the Israeli is going to put all their intelligence data in Germany, for example. Maybe they will, but I don't know. I don't think so. So our approach to solving the problem is using AI to have a high degree of automation inside of our data centers and then and use that offensively to lower our own cost of running our data centers, lower the cost of the network because it's a much more distributed cloud than what our competitors are doing, which allows us to offer much lower prices and still make good margins in our cloud. So the answer is autonomy. The answer is AI, we use it everywhere. I think Elon Musk famously said, there are 2 kinds of software companies, those that use a lot of AI and the others.

Kirk Materne with Evercore. Larry, can you talk about the relationship with Microsoft on the interconnect basis. There 2 questions around that. One, how hard is that to accomplish, meaning if you're correct and infrastructure does become more of a utility. Can you plug in others if they decide to sort of join your view on this? And then secondly, doesn't this sort of shift the -- I guess, the competition up a layer to the services that run on top of infrastructure where you all and others perhaps have an advantage or more just history around the pass layer, if you will. .

Well, I think the answer is it's what customers want. I mean I didn't persuade Safra of anything. I think we talked about it and we both came to the conclusion, yes, people have investments in the Oracle database. People have investments in Microsoft software. Both our companies have a lot of history. Microsoft has a lot of history. They have huge installed base. We have a huge installed base. And they want to use software from Microsoft and software from Oracle, but a concept. And AWS just use software from AWS just -- I mean that's the they come into my walled garden, never leave. You try to move data out, I'm going to tax you to move data out. Maybe that can work for a while in the early days of cloud, but I think customers would like to use -- well, customers already use multiple clouds. It's not like they don't use AWS and Microsoft in the same company. The question is how gracefully do AWS and Microsoft coexist inside of that customer? And how gracefully does Microsoft and Oracle coexist inside of this customer? I mean most of -- most of AWS' customers use Oracle databases. All of AWS customers use Microsoft Office and other Microsoft tools. It should be -- I mean, there was a word, this used to be called open world and having open software used to be important. Now you take a while for you to convince me. No, no. In the cloud, you buy everything from AWS. That's completely different. You get one vendor. They supply everything. It's not in AWS cloud. You just don't use it. And you rely on AWS for all innovation. Innovation comes from AWS. I mean I don't think so. I don't think that works in the long term. And it's not working now. People use many different clouds. The question is, will the cloud vendors -- will the cloud vendors interconnect their clouds. And I think the answer is, well, obviously, yes, Microsoft and Oracle decided to enter -- put a very high-speed interconnect. That's a very efficient interconnect. If you use an Oracle Database in the Oracle Cloud and [indiscernible] Microsoft application, it runs at least as fast as that Microsoft application was attached to a Microsoft database. So we intentionally made sure that we gave you great low latency, high bandwidth performance for transaction processing, for queries, et cetera. But that was very, very important when we look at these things together. So I can't imagine why other clouds wouldn't want to do what their customers want them to do, maybe AWS will be a hold up for a while. I have no idea. I don't think but I think ultimately, all these clouds, there's going to be an Internet of Cloud. Does it make sense that the -- there are isolated pockets on the Internet? Does that make sense to anyone? I mean things can begin that way. people can build up and you can get started that way, where you have these walled gardens. But ultimately, if you're providing something like infrastructure, PaaS applications, do you think anyone will ever buy an application from -- an ERP application from Oracle and a sales automation application for salesforce.com? I think it's important that these cloud companies interoperate and coexist gracefully and the infrastructure clouds are linked, and you can mix and match the PaaS services you want. I think that's what customers want. I think that's what the cloud companies are going to do. Oracle and Microsoft kicked this off, we're going to -- all I'm going to say is we're going to continue down this path of inter operations and connectivity. And we think that's what customers want. And if there's a cloud company who thinks they can do -- I don't have to do that if I don't want to, that's a really interesting concept. Go ahead and try that. I don't think it's going to -- I don't know your customers are going to like it. So it's what customers want. That's why we're doing it. Left or right, gentlemen right here.

Okay. Larry, we're coming at the end of scheduled time, but this group will stay as long as you want. So leave it a if you will.

As long as I want. Okay. That opens up a number of questions. yes, sir.

Keith Bachman from Bank of Montreal. I wanted to ask about your vision and expectations for database growth, in particular, as Oracle is on the journey to $65 billion in revenue. We look at some of the recent data provided in the past, Oracle's collective family of database has actually undergrown the market. But I just wanted to think about how you view the growth potential as you look out over the next 3 years. . We heard us recently to show the partner community is pretty excited about the next version of autonomous coming out in '23, but I just wanted to hear why do you think database growth for the collective family improves, what are the key measures and any other insights you want to offer.

Okay. I'm going to surprise everyone be slightly arrogant. We -- everyone's going to be really surprised with us. The -- we're way better at database than anybody else. And I'll -- and forget the Oracle database for a moment and look at the MySQL HeatWave database. Did you see the benchmark comparison between us and a product called Snowflake Did you see it? Did anyone see it? Yes, we're -- I mean, we're 17x faster than stuff like 1/3 of the cost. With Snowflake, you have to go to a lot of effort to move your data out of your transaction processing system into your data warehouse. Once you do that, then we're still send 17x faster and 1/3 of their cost. So if we can't beat Snowflake at this, I mean I think we will have no trouble beating stuff like. And by the way, the Oracle database is faster than New Oracle, than MySQL HeatWave database. . And -- but MySQL HeatWave open source, Snowflake isn't open source. So what do we go? MySQL open source smokes Snowflake. Maybe open source isn't important anymore. I mean it's -- this is also interesting to me. But the economics and the ease of use of MySQL HeatWave is so much better than Snowflake that we think that's a problem for them. It was a problem for IBM when we were much faster. It was a problem for Microsoft when we were much faster than SQL Server. We won the database wars. We were dominant in the database wars. Then the cloud showed up and Oracle wasn't available really and Google and Microsoft and AWS. And you say, well, Oracle is undergrowing the market well because there was this interval where we were not available in all the clouds that we intend to be available in all the clouds. And if we're available all the clouds, the question is, can we -- are we technically capable of beating Snowflake? Can we deliver better economics in our cloud, Snowflake like pays AWS to be in their cloud. Snowflake pays Google to be in their cloud. Snowflake pays Azure to be in their cloud. In the Oracle Cloud, we just buy computers and put it on and it's way cheaper. And it's way faster. And by the way, if you're in Azure, you can use MySQL HeatWave. If you're in AWS, you can use MySQL HeatWave. So our cost of running MySQL heatwave is way less than Snowflake. Our performance is way better than Snowflake. Our ease of use is way better than Snowflake. We beat them in every way that matters. We've beaten every database company on earth and consistently, except -- and we got a little bit of a hitch when the cloud showed up, and we were just not -- can we beat Aurora? Can we beat Amazon Aurora and Amazon Redshift? Aurora is Amazon's version of MySQL. Can we beat them in the database business? Well, if we can beat Microsoft in the database business and we can beat IBM in the database in the glory days of those companies, Microsoft days, glory days are continuing. IBM is not so much. But in the glory days of IBM, we beat them in database. We just have way better technology. And if we beat them, I promise you we can beat snowflake. I mean you don't have to take me seriously, but we are at least a decade ahead of them in technology. They have nothing like autonomous database. They have nothing like what we -- this massively parallel processing that occurs in the Oracle database and in HeatWave. They got a hot brand right now. We'll see how long that lasts. We think we will preserve our franchise in database. And by making sure that our database is available in all the clouds and making sure our database is much faster, much more secure, much more reliable. And this is the one that freaks everybody out and much cheaper than Snowflake or anything that Amazon sells because when you're much faster than the other guy, you are much cheaper because when you pay by the minute, time is money. Next question, guy, over here. And then -- I mean I'll stay until the last person leaves. Decided that's the best way to time -- when Safra has left, I know that I've really overrun my time.

This is Keith Weiss from Morgan Stanley. I appreciate all the time you're giving us. I wanted to come back to the health care opportunity. Massive opportunity, great mission. We've obviously felt the inefficiencies within the health care system. But other technology vendors have tried this, and it's not just the technology. It's also all the constituents you have to deal with, all the regulatory environment. There's a lot of cats to heard. How do you think you guys are going to be able to approach that and sort of do better on that side of the equation versus other predecessors who have really had to pull back from efforts to try to do this.

Yes Well, right now, we have a great example, right? We have this contract with the United States government for the Department of Defense, where we're doing the next-generation system for the Department of Defense and the VA. And I think nothing like delivering a fabulous system to replace what they currently have to create converts. So we're just going to delight our customers. I mean, delight this one big customer in particular. That's very important because it's a huge number of people. And so the idea is to -- by the way, Cerner has a number of customers in NHS also. So our plan is simply to deliver surprisingly great technology on our -- to our existing customers to just get it automatically and include all of the public health systems that are layered on top of the provider clinical systems include the patient engagement systems, include the automated payments approval system, include the workforce. Now we have lots of customers that use our HCM, a lot of providers, Mount Sinai, Cleveland Clinic, Mayo Clinic, already use our HCM. And he said, "Well, what does HCM got to do with health care? Well, managing their workforce is being done by our HCM system. So hiring nurses, scheduling nurses for the OR to Monday -- 2 weeks from now on at 6:00 a.m. on Monday morning when the operating theater opens, getting those people scheduled. Those nurses do not work for you full time, they are contractors. So helping them manage their contract workforce, scheduling their contract workforce, paying them, helping them do a better job ordering and maintaining in medical supplies and inventory through the procurement system in addition to the clinical systems that provide -- all the patients health -- make all the patients' health records instantaneously available just like all the patient's financial records are instantaneously available through the global credit system, all the patient's health record should be instantaneously available where it isn't now, to solve those problems to actually deliver it toward the existing set of customers and delight to those customers, to deliver public health systems that start tracking in every hospital. We talk about looking for the next virus, having surveillance system that looks, that scours the world, does gene sequencing of pathogens all over the world is called [indiscernible]. We did in concert with the University of Oxford where we're looking all over the world for the next pathogen that is going to cause the next pandemic. That's very important. And we're going to do that. But we're using the same system inside of every hospital to look for bacteria, these super bacteria that are resistant to antibiotics and gene sequence of that bacteria and be able to identify that, that something hospitals need to do every day. That system, we're expanding the [indiscernible] as we speak to tackle that problem of antibiotic resistance to bacteria that are uniquely found in hospitals that are very, very dangerous to do all of that, to deliver those to our existing customers, just show up it is part of their Cerner system. If we do that, if we create these exemplars, and we show the world, our customers and then the world that we can deliver this, then that will cut through all of the red tape than any other thing we can do. We just have to make our existing customers more efficient, more successful, keep people out of the hospital, improve lives if the existing systems we deliver can do that. People will then adopt, more people will then adopt those systems. Thank you all very much.

All right, everybody. Thank you. Larry. Thank you all for coming. Really appreciate you spending some hard time out here with us. Remember, turn off your Netflix, turn off your Hulu, turn off Amazon Prime, turn on Oracle, Oracle CloudWorld, watch on demand, snuggle up with your loved ones, it will be a great time. Take care. Good night. everybody. Bye, bye.