Cloud boosts Oracle earnings

Software giant hails growth in SaaS adoption

Oracle's financial performance was buoyed by the cloud in the software giant’s latest set of revenue figures.

The database company revealed its second quarter earnings increased by seven per cent with earnings of $3.2 billion. This was on revenue of $9.3 billion, up two per cent on the year.

Its SaaS business witnessed bookings growth of 35 per cent in the quarter. “Our fastest growing cloud services were Fusion Human Capital Management and Fusion Salesforce Automation, each growing bookings at a triple-digit rate, “ said Oracle chief executive Larry Ellison.

Mark Hurd, president of Oracle, added: “The growth of just our software business is more than double the revenue of Workday."

Ellison said Oracle would be a strong player, especially at the platform level and cited Java as one of its strengths.

“We think we’re going to be especially strong in platform. We think our two platform brands – Oracle Database and Java – are stronger than any of our SaaS competitors,” said Ellison.

“If you look at Salesforce.com and Force.com and their capabilities versus the Oracle database and Java, we think we have a considerable advantage,” he added.

Ellison said his firm would be more price competitive with the likes of Amazon, Microsoft Azure and Rackspace.

“We intend to compete aggressively in what I'll call the commodity – commodity not being a bad word, the commodity infrastructure as a service marketplace, but we're not going to have that alone. It is not going to be just Infrastructure-as-a-Service,” he said.

"We are going to be cost competitive and price competitive, at the infrastructure level while being highly differentiated at both the platform level and the application level," added Ellison.

The main goal of Oracle is to gain customers at the high end of the stack and then sell them the rest of it. But Oracle’s chief financial officer Safra Catz warned that success would take time.

“We've ramped up the sales organisation, we are at full strength, and it takes time for that to pay off,” she said.

“We think we still have a lot of room as we expand our installed base,” Catz said. “Now we're going to start seeing expansion in the margins as the revenues follow through.

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