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Oracle believes its future is in the cloud, and the company expects its software-as-a-service revenue will be eclipsed by other services in the future. That was the message from company founder and CTO Larry Ellison today during the company’s quarterly conference call with financial analysts.

Oracle’s total cloud revenue for the quarter was $1.36 billion, up 13 percent from the same period a year ago. Software-as-a-service (SaaS) revenue was $964 million of that total, platform-as-a-service (PaaS) sales made up $183 million, and infrastructure-as-a-service (IaaS) made up $214 million.

“During this new fiscal year, we expect our PaaS and IaaS businesses to accelerate into hypergrowth, the same kind of growth we’re seeing with SaaS, as our customers continue to migrate their millions of Oracle databases to generation two of the Oracle public cloud,” he said, following the company’s release of its fourth quarter financial results.

Above: A chart shows Oracle’s quarterly cloud revenue broken down by segment.

Image Credit: VentureBeat/Blair Hanley Frank

The company’s SaaS business includes its suite of business applications, like its Cloud ERP offering, as well as its Data Cloud service. Its PaaS business includes a managed Oracle Database service, and its IaaS segment includes revenue from companies renting time on machines in data centers the tech titan owns.

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That growth is good news for Oracle, which is positioning itself against the likes of Salesforce and Amazon Web Services. The latter is a bit of a stretch at the moment, since AWS made more than two-and-a-half times what Oracle did in its most recent quarter.

The company’s IaaS revenue saw the greatest acceleration in year-over-year and quarter-over-quarter growth compared to the other segments. This is a positive sign for the company’s fairly new second generation infrastructure offering, which was unveiled at its OpenWorld conference last year.

However, despite the expected growth, Oracle doesn’t plan to scale up the capital expenditures for its cloud unit in the coming fiscal year. The enterprise tech giant expects to spend $1 billion in capital expense to support its cloud unit, according to Safra Catz, one of Oracle’s CEOs.

That flies in the face of the collective wisdom of its competition in the public cloud space. Microsoft, AWS, and Google all tout the amount of money they’re spending on building out their global data center footprint, while Oracle wears its comparative lack of spending as a badge of honor. The company’s argument is that it can do more with fewer servers than its competitors.

As part of its expected growth, Oracle opted to shift the financial reporting structure for its cloud business this past quarter. Instead of breaking out IaaS into a separate category and lumping SaaS and PaaS together, Oracle will report SaaS on its own, with IaaS and PaaS lumped together.

Above: Oracle’s PaaS revenue by quarter.

Image Credit: VentureBeat/Blair Hanley Frank

Looking at the company’s PaaS revenue over the past two fiscal years, it’s an understandable shift. During the three-month period that ended in August 2015, the company only brought in $13 million in PaaS revenue, compared to $438 million in SaaS revenue and $160 million in IaaS revenue. That business underwent massive growth in the intervening years, as seen in the chart above.

The company outperformed investor expectations, and its stock rose 10 percent in after-hours trading.

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