Oracle's Ellison: SAP Needs To Acquire More, Like Us
Oracle executives touted the results as a sign that the company is winning market share from its rivals, but financial analysts cautioned that Oracle's acquisitiveness muddies its results. For example, Oracle's new applications software sales shot up 80 percent, from $127 million last year to $228 million in this year's first quarter, but Siebel sales made a large, unspecified contribution to Oracle's bottom line. Oracle closed its Siebel purchase during the third quarter of its last fiscal year.
Including its database, middleware and applications lines, Oracle's overall new license sales rose 28 percent, to $804 million, in the quarter ended Aug. 31. Its maintenance revenue showed similar growth, increasing 29 percent to $1.9 billion, while its services revenue rose 33 percent to $846 million. Oracle easily surpassed the Thomson Financial consensus revenue estimate of $3.47 billion.
Oracle CFO Safra Catz, also the company's co-president, forecast equally bullish results for its current quarter. Revenue is projected to increase 22 percent to 24 percent, with software license revenue rising in the range of 15 percent to 20 percent, she said.
Oracle CEO Larry Ellison used his prepared remarks during the company's earnings call to blast away at Oracle's chief rival, SAP. While conceding that SAP has the edge against Oracle in some industries like oil and gas, Ellison suggested that unless SAP becomes a frequent acquisitions shopper, like Oracle, it will be unable to keep pace with Oracle's growing vertical expertise. SAP recently suffered a soft quarter of lower-than-expected sales growth.
"SAP will become progressively less competitive in several industries and continue to experience slowing organic growth," Ellison said.
Oracle Co-President Charles Phillips spoke about the company's strongest growth areas, including its Fusion middleware suite and its applications verticalizations. Both are areas where Oracle is looking to increase its work with VARs and systems integrators, he said.
"We're signing up resellers aggressively on each vertical," Phillips said. "All we need is some additional distribution, and we'll have that over the next year."