Japan Technology: IT Services: Oracle Japan 4Q read-across: Cloud services growing/on-premise declining; little impact from Middle East

研报英文原文证据摘录

Japan Technology: IT Services: Oracle Japan 4Q read-across: Cloud services growing/on-premise declining; little impact from Middle East

Goldman Sachs Japan Technology: IT Services

(Exhibit 2). Growth was driven by IaaS/PaaS (OCI: Oracle Cloud Infrastructure),

reflecting successful capacity expansions for existing customers and the start of

operations for large new projects. By industry, the cloud shift is progressing in the

public sector, telecommunications, and distribution/services. Earnings contributions

from Oracle Alloy (a model where sales partners provide OCI from their own data

centers) are not yet substantial, but NTT Data is scheduled to launch the service in a

2nd region in 2026, NS Solutions in its 1st region in 2H3/27, and SoftBank Corp in a

2nd region in October 2026. Oracle Japan expects real earnings contributions to

emerge in FY5/28 (DC construction takes some time as customers are primarily large

enterprises). Management expects the high growth in cloud service to continue, led

by OCI, and assumes a sales growth rate of +20% to +30% yoy for FY5/27.

n On-premise: FY5/26 software license (on-premise) sales were down 2% yoy.

Compared to management assumptions (a mid-to-high single-digit (%) yoy decline),

demand for on-premise solutions in the public sector, finance, and manufacturing

was stronger than expected, pushing sales above guidance. However, the cloud shift

is progressing, particularly in telecommunications and distribution/services,

resulting in a slight overall sales decline for the segment. Seeing a further

advancement in the transition to the cloud, the company looks for (1) a double-digit

(%) yoy decline in FY5/27 software license sales, and (2) flat yoy sales in software