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Oracle (NYSE: ORCL) may have delivered a rather tepid quarterly outlook as part of its recent result announcement. But the market is very hopeful of its cloud strategy as the company continues to battle it out with Amazon and adds more companies to its arsenal. First, the financials.

Oracle’s Financials

Revenue for the second quarter ended November 2016 grew 6.2% over the year to $9.63 billion with an EPS of $0.70. The market was looking for revenues of $9.567 billion and an EPS of $0.68.

By segment, on-premises software grew 3% over the year to $6.3 billion. Cloud revenues grew 44% over the year to $1.52 billion, but fell short of the Street’s forecast of $1.56 billion. Within the cloud, public cloud infrastructure and platform revenue grew 21% to $396 million, and cloud SaaS revenue grew 55% to $1.12 billion. Meanwhile, hardware revenues continued to fall and reported a 9% decline to $940 million. Services revenues came in flat at $856 million.

The market was disappointed with its outlook. For the current quarter, Oracle forecast a revenue growth of 2%- 4%, falling short of the analyst estimate of 4.3% growth. It expects to end the quarter with an EPS of $0.68-$0.70, compared with the market’s forecast of an EPS of $0.72.

Oracle Competing with Amazon

For Oracle, like others in the tech industry, it is currently all about the cloud. Oracle has been focused on the SaaS sector, and is driven to rank among the top two SaaS application suite providers. It is making sure it achieves that status through price wars, product launches, and acquisitions. According to a Gartner report published last year, in terms of overall cloud IaaS market share, AWS commands 44% of the sector while Microsoft Azure is at 7.1%. IBM and Oracle each have less than 2% market share within the sector.

In the last quarter, Oracle’s cloud business accounted for $1.5 billion of which software-as-a-service sales brought in the majority revenues. The infrastructure-as-a-service and platform-as-a-service offerings brought in a another $0.4 billion. As part of its database improvement, Oracle is working on the release of, what it calls, “the world’s first autonomous “self driving’ database,” using artificial intelligence (AI). The AI-based Oracle database will be fully automated and will not require any human effort for administration, thus reducing overall cost of management. The database will be able to detect and patch a security vulnerability, when detected. Oracle claims that the price of running this intelligent database will be half that of running a database in the Amazon Cloud. Besides being cost effective, Oracle is offering 99.995% uptime on the product. The solution will be a direct competitor to Amazon’s Redshift, the data warehousing solution available on AWS. If Oracle succeeds in taking significant market share away from Amazon, it would be a significant achievement for a late entrant into the IaaS space.