A Wall Street analyst says Oracle's 'greatest' growth opportunity is in cloud applications, but it's likely to be a 'multi-decade, slow-moving' process

• A Wall Street analyst says Oracle's "greatest opportunity" for growth is in cloud software applications, but it may take a long time for the tech giant to see a meaningful lift in that market.
• "This may be a multi-decade, slow-moving migration to the cloud and may be difficult for Oracle with substantial growth in any given year," Instinet analyst Christopher Eberle told clients in a note.
• Oracle is a leading provider of software installed in private data centers, but the cloud, which let businesses run networks on and access applications through web-based platforms, has disrupted the market it has dominated for decades.
• Oracle is a contender in the cloud applications market, although it faces stiff competition from the likes of Microsoft and Salesforce. Oracle shares slipped Friday after the company posted weaker than expected revenue.
• Click here for more BI Prime stories.

The cloud continues to be challenging for Oracle, but a Wall Street analyst says there's one arena where the tech giant could definitely kill it: cloud applications.

There's just one catch: growing that business could take a long time.

"We believe Oracle's greatest opportunity is with Cloud ERP," Instinet analyst Christopher Eberle told clients in a note. But "this may be a multi-decade, slow-moving migration to the cloud and may be difficult for Oracle with substantial growth in any given year."

Enterprise resource planning software refers to the applications that businesses use to perform different tasks, from managing inventory to monitoring financial transactions. Businesses, including big corporations, have generally accessed these applications through in-house data centers. That's a market that Oracle has dominated for decades, together with another enterprise software powerhouse, SAP.

But the rise of the cloud disrupted that market. It made it possible for businesses to set up their networks on web-based platforms run by the likes of Amazon, Microsoft and Google. It also gave rise to software as a service, which allows businesses to pay a subscription usually based on the number of users for access to applications.

While Oracle is not widely seen as a major player in the infrastructure and platform segments of cloud computing, it is a contender in the cloud software market where it offers a broad suite of applications.

But the company is battling it out with other strong players. Microsoft controlled 17.2% of the $71.9 billion software as a service market in 2018 followed by Salesforce with 13.1%, according to Gartner. Oracle was third with 6.2%.

Shares of Oracle slipped nearly 3% to $54.99 in late Friday morning trades, after the company posted weaker than expected revenue.

Got a tip about Oracle or another tech company? Contact this reporter via email at bpimentel@businessinsider.com, message him on Twitter @benpimentel or send him a secure message through Signal at (510) 731-8429. You can also contact Business Insider securely via SecureDrop.