Oracle Corp.’s attempt to become a cloud computing leader still hasn’t taken off as much as investors had hoped.

That’s apparent following its fiscal second-quarter earnings reported today. Even though both profit and revenue beat forecasts, Oracle saw its shares fall by nearly 7 percent in after-hours trading as its cloud computing revenue growth fell slightly short of expectations. And a forecast for the current quarter’s cloud revenue growth appeared to come in even further short.

More than that, Oracle’s forecast of 2 to 4 percent revenue growth in its third quarter fell short of analysts’ expectations of 4.3 percent. It wasn’t immediately clear why, but Oracle Chairman and Chief Technology Officer Larry Ellison (pictured) conceded in comments on the earnings call that difficulties in connecting Oracle’s new Cloud Machine and related software installed in customers’ data centers to Oracle’s data centers. That’s taking longer than expected because each customer’s data center is a little different, Ellison said.

Oracle said it earned a profit of nearly $3 billion before certain expenses such as stock compensation, or 70 cents a share, up 14 percent from a year ago. Revenue rose 6 percent, to $9.62 billion. Analysts had expected an adjusted profit of 68 cents a share on revenue of $9.57 billion. Traditional on-premises software brought in the vast majority of revenue, at $6.3 billion, up 3 percent. But the portion from new software licenses was flat at $1.35 billion, making growth in cloud revenue crucial.

“Customer adoption of our cloud products continues to be strong,” co-Chief Executive Safra Catz said during the earnings conference call. “Bottom line, our transition to the cloud is going well.”

Total cloud revenue jumped 44 percent, to $1.5 billion, comprising 16 percent of overall revenue. That’s near Oracle’s own top-end forecast, but Wall Street was modeling $1.56 billion, according to Thomson Reuters. Ellison has made cloud computing, a burgeoning trend in which companies increasingly use software hosted by cloud providers instead of solely in their own data centers, a key focus of Oracle’s efforts in the past couple of years.

Software-as-a-service applications saw growth of 55 percent, to $1.1 billion, while infrastructure as a service, the base-level computing and storage services that compete with public cloud leaders such as Amazon Web Services Inc. and Microsoft Corp.’s Azure, grew only 21 percent. That’s well behind the growth rate of the leaders. But Catz added that the cloud revenue includes older hosting revenue that’s slowing, masking higher growth in newer-generation cloud computing.

Co-CEO Mark Hurd also put a more positive spin on the results. “We expect to extend our lead by selling around $2 billion in new enterprise SaaS application cloud subscriptions over the coming four quarters,” he said. “That’s more new SaaS sales than any of our competitors.”

Still, Charles King, president and principal analyst at Pund-IT Inc., said the reality is that “even as Oracle’s traditional business remains static, it’s efforts in the cloud aren’t growing as quickly as many believe they should be.”

Indeed, for the current quarter, Catz said cloud revenue is expected to rise only 21 to 25 percent, far short of analysts’ forecast of $1.69 billion, up 42 percent.

Catz also forecast total company revenue up 2 to 4 percent and adjusted profit at 68 to 70 cents a share, or 71 to 73 cents in U.S. dollars assuming today’s currency exchange rates. But cloud revenues are the key trend investors are interested in, which is why Oracle saw the biggest one-day stock drop in four years after the first-quarter results with disappointing cloud revenue growth were announced.

This time, Oracle didn’t fare much better, as shares were falling almost 7 percent in after-hours trading today after closing up in regular trading by about a quarter-point, to $50.19 a share. The stock still hasn’t recovered from its swoon a quarter ago. Just before then, it had hit an all-time high of $52.80. But shares are up 30 percent so far this year.

Oracle’s prospects depend most of all on how fast it can move its software and its customers to its cloud. Oracle remains far behind leaders such as AWS and Microsoft Azure and even other upstarts such as Google Cloud Platform, at least for the base-level infrastructure as a service that provides computing and storage services.

That’s one reason the company has been focusing on other layers of the cloud computing “stack,” such as platform as a service and software as a service, or online business applications, such as Salesforce.com Inc. and Workday Inc. provide. Oracle’s database is certainly an established PaaS service, and it also offers a wide range of enterprise resource planning, supply chain management and other core business software as a service, including from its acquisition of NetSuite Inc. last year.

Oracle is also trying to persuade existing and new customers that its long experience in data centers makes it the best choice for the majority of companies that need to do computing not just in the cloud but in their own data centers as well, either because it’s costly and time-consuming to move data or applications or because of regulatory limitations on where data resides.

Ellison & Co. have been pushing the notion that Oracle is the only one that can provide soup-to-nuts technology to manage that kind of hybrid cloud. It offers hardware appliances to mirror cloud services inside data centers as well as software and cloud services, promising the services will work the same on-premises or off.

But it has a big hill to climb. “Going to the cloud is the right thing to do,” said Peter Burris, head of research at Wikibon, a SiliconANGLE sister company. But he said some Oracle customers and prospects are reticent about Oracle’s cloud because the company has a long reputation for raising software license prices every year.

Oracle has also been revamping its sales force, which was traditionally accustomed to selling big multiyear, multimillion-dollar software licensing contracts. More new salespeople are being trained to go after the smaller businesses that never bought on-premises gear or software, some of which have grown into giants such as Uber Technologies Inc. and Airbnb Inc.

Oracle introduced a flurry of new products last quarter, mostly at its annual Open World conference in October, including a “self-driving” database as well as a new cloud pricing plan to be more competitive with public cloud rivals.

Photo: Robert Hof/SiliconANGLE