Whether Oracle Corporation (NYSE:ORCL) did well or did poorly last quarter is largely a matter of perspective. But with Oracle stock falling more than 9% since the release of its fiscal Q3 results, it’s safe to say investors see the glass as half-empty.

It’s not a response that makes a whole lot of sense on the surface. The database giant managed to meet revenue estimates and even top earnings expectations. Those who know the Oracle story well, however, know that investors were watching one metric more closely than any other: cloud-based revenue — which fell short of expectations.

The irony? Oracle did it to itself.

Oracle Earnings News

Cutting right to the chase, Oracle was late to the cloud computing party.

The company rose to prominence in the 90’s and into the 2000’s by selling database software installed and used entirely on organizations’ own servers. It’s not as efficient or effective as cloud-based alternative arrangement became just a few years back. But Oracle stuck with its legacy approach even as Amazon.com, Inc. (NASDAQ:AMZN) and Microsoft Corporation (NASDAQ:MSFT) were developing products that would be clear competitors to Oracle’s aging platforms.

That (finally) changed just a few years ago with Oracle developing some new cloud-based technologies that corporate consumers want. It’s been a slow and largely ineffective transition though, as rival cloud providers are relatively well entrenched.

The proof is in the numbers.

For the quarter ending in February, Oracle turned $9.77 billion worth of sales into an adjusted operating profit of 83 cents per share. The top line was close enough to analyst estimates of $9.78 billion to count as a meet. And the bottom line handily exceeded analysts’ outlook for a profit of 72 cents per share. The top and bottom lines of the income statement were both better than year-ago comparisons, with revenue up 6.1% year-over-year.

Oracle’s cloud software and service arm even saw impressive revenue growth of 32%.

So what’s the problem then? For all the talk of transition, the company’s cloud-based software and service division still only accounts for 16% of Oracle’s total business. The overhaul isn’t living up to the hype.

Looking Ahead for Oracle Stock

For Oracle, things may get worse before they get better.

For the fourth fiscal quarter that’s currently underway, Oracle expects its cloud business growth to slow to a pace of between 19% and 23%. That’s less than the pace owners of Oracle stock have seen over the prior three quarters, and less than the 27% growth analysts had been modeling. This was likely the key cause of the plunge ORCL stock suffered on Tuesday.

…but not the only reason. Fanning the bearish flames was a Q4 revenue growth outlook of only between 1% and 3%. Indeed, the company may not even do that well, if its legacy on-premise database business growth continues to slow.

Because of all this, analysts are losing hope. KeyBanc Capital’s Monika Garg downgraded Oracle stock, lamenting that the transition to more cloud-driven business is taking “much longer to play out” than anticipated. Daniel Ives, head of technology research at GBH Insights, offered a more direct observation: “Investors continue to be frustrated by the one step forward, two steps backward.”

Bottom Line for Oracle Stock

In Oracle’s defense, it’s difficult for any large company to switch gears. It’s also difficult for a major player to drive big revenue growth as it’s already generating so much revenue that any growth is relatively small compared to existing revenue streams.

On the other hand, it’s difficult to feel sympathetic to any organization that didn’t recognize that cloud computing was the future.

To this day, Oracle hasn’t waded into the deeper end of the cloud computing pool.

Instead, it’s trying to meld its on-premise licensing model of yesteryear with new cloud technologies. And if anything, it’s rekindling a focus on licensing rather than cloud services. At this point, Oracle is just confusing current and would-be clients, many of whom have already picked a different partner anyway. As Wedbush Securities analyst Steve Koenig flatly put it:

“The challenge for ORCL is with its database business, namely getting its database customers to choose Oracle Cloud instead of deploying their Oracle licenses on AWS, Azure, or Google.”

In trying to be all things to all people, Oracle isn’t anything of clear and simple value.

That may be one of the drawbacks of two CEOs and an a high-profile executive chairman like Larry Ellison, who also used to be the CEO of Oracle and in many regards still acts like one.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley.