In the crowded enterprise software market, Oracle is trying a classic tactic with a modern twist. Instead of charging extra for new artificial intelligence features, the company is giving them away to customers of its Fusion Cloud applications for finance, HR, and supply chain. This move, detailed in a recent report, is a direct response to a widespread slowdown in business software sales.

Oracle’s core challenge is one shared by rivals like Salesforce and Workday: growth in cloud application subscriptions has cooled. While its overall cloud revenue remains strong, driven by infrastructure, the applications segment is expanding at a more measured pace. With many large companies finished with major cloud migrations, winning new business has gotten tougher.

Oracle’s solution is to bake AI—such as tools for automated invoice processing or generating financial reports—directly into existing software packages at no added cost. The goal is to make its products indispensable, reduce customer turnover, and beat competitors who charge premiums for similar AI add-ons.

The real payoff, however, is intended to flow downstream. Every AI task performed within a Fusion application runs on Oracle’s own cloud infrastructure (OCI), consuming computing power. As customers use more AI, their OCI bills rise. This strategy effectively turns Oracle’s applications into a pipeline for its higher-margin infrastructure business, which has been booming due to AI-related demand.

This approach pressures competitors, particularly Salesforce, which has struggled to monetize its AI features. While Salesforce offers sophisticated agent technology, its premium pricing contrasts with Oracle’s bundled model. SAP also bundles AI, but many of its customers remain on older systems that cannot use the new features.

The risk for Oracle is clear. If increased infrastructure usage from its application customers doesn’t materialize, the company could be left subsidizing expensive AI development for little return. Success hinges on whether these AI tools prove genuinely useful, driving daily reliance and, consequently, greater cloud consumption.

Oracle’s integrated stack—controlling both the software and the servers it runs on—is its declared advantage. The industry is now watching to see if this bet, that the true value of AI resides in the infrastructure, will redefine the enterprise software playbook.

Source: Webpronews