Similarly, the ongoing transition to cloud-based computing services gained speed in the Covid era, as lockdowns had businesses prioritizing scalable, flexible, reliable technology solutions in what had suddenly become a work-from-home world. In a process that began even before the pandemic, Oracle (ORCL, Financial) has been migrating its 40 years of database expertise to the cloud to meet the needs of its multinational blue-chip customer base and to compete with the cloud-native providers that have sought to unseat it. Oracle’s scale and expertise has enabled it to maintain enviable customer renewal rates in excess of 90% and an annu-ity-like stream of recurring cash flows based on long-duration service contracts.8 Though the continued execution of its cloud transformation remains a risk, the company’s well-managed balance sheet has enabled it to consistently return cash to its investors through a robust share-buyback program.
From First Eagle Investment (Trades, Portfolio)'s Global Value Team 2021 annual letter.
