Yes, that was good news. The quarterly numbers sent Oracle (ORCL) shares up more than 6%, the highest in years.

But despite the company’s decent quarter, many investors viewed the recent earnings as not much more than a “modest near-term positive,” in the words of Macquarie Capital analyst Brad Zelnick. Why? The competitive landscape is getting harder, not easier, for legacy vendors like Oracle, especially given CIOs’ increasing preference for software that’s delivered online, not via on-premise installations.

Case in point: A recent CIO survey from financial research firm Bernstein C. Sanford showed that the move to software-as-a-service may have a “meaningful impact on Oracle as a greater net share of CIOs see spending less of their IT budget with Oracle in five years than any other vendor in our survey.” Ouch. According to the survey, Oracle in particular is viewed as a laggard, reflecting the company’s tardy embrace of the cloud. Again, from the report: “From a vendor perspective, CIOs’ view of HP appears to be improving off a very low base, EMC and VMware remain in good shape medium to longer-term, and Apple and Samsung appear poised to gain more enterprise spending dollars. On the flip side, results point to declining share of spending for IBM, DELL, HP, and particularly Oracle.” Ouch again.

To be fair, Oracle CEO Larry Ellison has bought into the cloud, quite literally: He has spent billions of dollars buying up cloud computing companies like Taleo and RightNow Technologies over the last few years. (Just this morning, the company acquired the cloud-based business-to-consumer marketing firm Responsys for $1.39 billion.) The results appear promising. “Our billion dollar SaaS business delivered overall bookings growth of 35% in the quarter,” Ellison said in a release issued earlier this week. “Our fastest-growing cloud services were Fusion Human Capital Management and Fusion Salesforce Automation, each growing bookings at a triple-digit rate.”

At the same time, sales of new software licenses and cloud software subscriptions revenues were largely unchanged from the previous quarter, and the company’s hardware business isn’t out of the woods yet either. And while Oracle now has a portfolio of cloud-based software products, pure-play software-as-a-service players like Workday (WDAY) and Salesforce.com (CRM) are growing at a much faster — albeit money-losing — rate, and taking market share away from both the Redwood Shores, Calif.-based company and other legacy vendors. To fight back, Oracle has tried rejiggering its sales force to try to compete head-to-head with its younger, nimbler rivals. But its increased spending on sales and marketing — increasing at a faster pace than revenue is currently growing — means increasing pressure on its bottom line.

So where does Oracle go from here? “We would not be surprised to see ORCL drift higher, especially if market gets defensive,” Cowen & Co analyst Peter Goldmacher wrote in a recent note to clients. “However, we believe fundamentals remain lackluster and specter of declining margins is upon us.”

In other words, whether or not Oracle is all in on the cloud — and regardless of its better-than-expected recent quarter — the company’s uphill battle is far from over.