'The introduction of AI is an accelerator, not a replacement for packaged applications': Oracle bets on AI to strengthen customer ROI

Oracle believes artificial intelligence (AI) will transform the way software is utilized, but it will not replace software applications altogether. Software will continue to be used for many years to come, with agents interacting with structured software while humans manage those agents. Oracle's co-CEO, Mike Sicilia, emphasized in the company's first earnings call of fiscal 2027 that AI is an accelerator, not a replacement for packaged applications.

Sicilia argued that enterprise software suites provide standardized, end-to-end processes and rules that AI cannot replicate. However, he acknowledged that AI could play a significant role in software development in the future, particularly in areas such as employee training and upskilling. AI agents can streamline tasks by utilizing existing workflows and business rules, allowing humans to move into supervisory roles.

Oracle predicts that AI will reduce the time and cost involved in deploying enterprise applications, resulting in a much faster return on investment (ROI) for customers. The company plans to introduce a new agentic AI accelerator next month to automate certain aspects of software implementation.

Despite a 10% increase in quarterly SaaS revenue, Oracle's overall software revenue declined by 3%. However, cloud revenue, which encompasses the company's infrastructure and AI capabilities, grew significantly by 60%. Looking ahead, Oracle maintains that while AI may alter software interfaces, it will not replace the underlying software.