Welcome!

Recurring Revenue Authors: Yeshim Deniz, Elizabeth White, Xenia von Wedel, Liz McMillan, Carmen Gonzalez

Related Topics: Java IoT, Microservices Expo, Recurring Revenue

Java IoT: Article

Sun Burns Oracle

The uh-oh point was hardware revenues, down 6% to $1.2B, but still better than the reported $800 million Wall St projected

Oracle performed trimly enough last quarter reporting results Thursday that tore through estimates and whisper numbers.

It plunked earnings of 75 cents a share, or $3.9 billion, up 27%, on Wall Street's plate. On a GAAP basis earnings were up 36%.

Revenues were up 13% to $10.78 billion.

The company was only supposed to do 71 cents a share on revenues of $10.75 billion according to Wall Street's consensus. Oracle itself had projected 69 cents-73 cents.

It was Oracle's very first $10 billion quarter. Growth was said to be broad-based with no material deals.

Its all-important new software license revenues were up 19% to $3.7 billion "with almost no help from acquisitions" according to Oracle president Safra Catz. Expectations were for $3.6 billion. She preened that Oracle's software sales are now bigger than IBM's, which if cut out of Blue would be a Fortune 500 company on their own.

However, new licenses in fiscal Q3 were up 29%, touching off fears that tech spending ain't hanging in there.

Product support revenues came to $4 billion, up 15%.

The uh-oh point was hardware revenues, down 6% to $1.2 billion, but still better than the reported $800 million Wall Street projected. Oracle previously bragged hardware would be up 6%-12%.

Oracle's stock dropped 6% after-hours and settled down 4% at $31.16 despite Catz's claim that Oracle "clearly exceeded even our own high expectations for Sun's business."

Sun is believed to be suffering from IBM and HP continually running off with its customers.

Ex-HP CEO Mark Hurd, who's now running the old Sun operation, said Oracle is selling less hardware at better margins or as Catz put it, it's in business to "make money, not revenues."

Sun has been "aggressively" dumping third-party gear like LSI and Hitachi storage and Hurd has added salespeople, 800 last quarter, to increase coverage, claiming Oracle is under-distributed.

There are now more than 1,000 Exadata machines installed worldwide, a plateau Oracle means to triple. Evidently Exalogic machines are selling better than the Exadata appliances.

Oracle's non-GAAP operating margin was a narrowed 48% and its non-GAAP operating income was up 19% to $5.2 billion. Catz said Oracle would return to pre-Sun margins soon.

Since it's the end of Oracle's year it said its GAAP total revenues were up 33% to $35.6 billion while non-GAAP total revenues were up 33% to $35.9 billion, new software licenses hit $9.2 billion in the year and it sold $4.4 billion worth of hardware pushing GAAP net income up 39% to $8.5 billion, or $1.67 a share, and non-GAAP net income up 34% to $11.4 billion, or $2.22 a share.

Oracle CEO Larry Ellison was quoted as saying in a canned statement that the company's "database business experienced its fastest growth in a decade" in FY11. New cloud and in-memory features reportedly led to increased sales. It's now moving into Big Data.

Live on the conference call, Ellison said current valuations "don't make sense" and potential acquisitions are "not attractively priced" so the company is focusing on organic growth despite the $29 billion it's got in the bank. Catz claimed Oracle had a "lot of leverage left in its model."

Ellison is promising to take share from SAP and Salesforce.com.

Oracle is forecasting sales this summer of $10.75 billion-$10.88 billion returning 45 cents-48 cents. Catz said new licenses would be up 10%-20% with hardware falling somewhere between negative 5% and up 5%.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


IoT & Smart Cities Stories
SYS-CON Events announced today that DatacenterDynamics has been named “Media Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY. DatacenterDynamics is a brand of DCD Group, a global B2B media and publishing company that develops products to help senior professionals in the world's most ICT dependent organizations make risk-based infrastructure and capacity decisions.
A valuable conference experience generates new contacts, sales leads, potential strategic partners and potential investors; helps gather competitive intelligence and even provides inspiration for new products and services. Conference Guru works with conference organizers to pass great deals to great conferences, helping you discover new conferences and increase your return on investment.
DXWorldEXPO LLC announced today that ICOHOLDER named "Media Sponsor" of Miami Blockchain Event by FinTechEXPO. ICOHOLDER gives detailed information and help the community to invest in the trusty projects. Miami Blockchain Event by FinTechEXPO has opened its Call for Papers. The two-day event will present 20 top Blockchain experts. All speaking inquiries which covers the following information can be submitted by email to [email protected] Miami Blockchain Event by FinTechEXPOalso offers sp...
Headquartered in Plainsboro, NJ, Synametrics Technologies has provided IT professionals and computer systems developers since 1997. Based on the success of their initial product offerings (WinSQL and DeltaCopy), the company continues to create and hone innovative products that help its customers get more from their computer applications, databases and infrastructure. To date, over one million users around the world have chosen Synametrics solutions to help power their accelerated business or per...
Poor data quality and analytics drive down business value. In fact, Gartner estimated that the average financial impact of poor data quality on organizations is $9.7 million per year. But bad data is much more than a cost center. By eroding trust in information, analytics and the business decisions based on these, it is a serious impediment to digital transformation.
@DevOpsSummit at Cloud Expo, taking place November 12-13 in New York City, NY, is co-located with 22nd international CloudEXPO | first international DXWorldEXPO and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time t...
When talking IoT we often focus on the devices, the sensors, the hardware itself. The new smart appliances, the new smart or self-driving cars (which are amalgamations of many ‘things'). When we are looking at the world of IoT, we should take a step back, look at the big picture. What value are these devices providing. IoT is not about the devices, its about the data consumed and generated. The devices are tools, mechanisms, conduits. This paper discusses the considerations when dealing with the...
SYS-CON Events announced today that IoT Global Network has been named “Media Sponsor” of SYS-CON's @ThingsExpo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. The IoT Global Network is a platform where you can connect with industry experts and network across the IoT community to build the successful IoT business of the future.
IoT is rapidly becoming mainstream as more and more investments are made into the platforms and technology. As this movement continues to expand and gain momentum it creates a massive wall of noise that can be difficult to sift through. Unfortunately, this inevitably makes IoT less approachable for people to get started with and can hamper efforts to integrate this key technology into your own portfolio. There are so many connected products already in place today with many hundreds more on the h...
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.