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Where Oracle’s Cloud Business Is Starting to Surge

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Larry Ellison, chief executive officer at Oracle Corp., speaks during an event at the company's headquarters in Redwood City, California, U.S., on Tuesday, June 10, 2014.Photograph by David Paul Morris — Bloomberg via Getty Images

Oracle is selling more cloud-based business software than traditional licensed products in Latin America, executives said on Tuesday, underscoring how remote computing has spurred demand from smaller businesses in new markets.

Chief Executive Officer Mark Hurd said the cloud business, which stores enterprise software and data on remote servers, lets Oracle (OCLCF) sell to clients without the budget for hardware or qualified staff, which can be tough to find in emerging markets.

Although Oracle’s cloud business contributed just 8% of total revenue in the latest quarter, the segment’s 49% growth from a year earlier helped to offset sales declines in its on-premise licensing business.

“One of the benefits of cloud is that you can now offer capabilities to a much broader set of customers,” Hurd said at an event in São Paulo.

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“We become the IT staff; we become the data center,” Hurd said. “So you’ll see that we made a whole bunch of investments in Latin America, in Brazil, to move downmarket at the same time as we continue to call up the biggest customers in the country.”

Oracle expects to gain “a ton of market share” in Brazil, Hurd said, adding that hiring has become easier during the current downturn. The company built its first Latin American data center in Brazil last year and has since made about 400 hires, expanding staff by more than 30% in a year.

Luiz Meisler, Oracle’s most senior executive in Latin America, said the company had “thousands” of cloud clients in the region and aimed to have more than 5,000 this time next year.

Small and mid-sized companies make up about 80% of the region’s customers and 20% of revenue, he said.