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

Related Topics: Recurring Revenue, Java IoT, Log Management

Recurring Revenue: Article

Oracle Has Good Numbers

Safra Catz Touts Momentum, Larry Ellison Knocks Autonomy

Oracle narrowly vaulted Wall Street's expectations Tuesday when it reported its first fiscal quarter. Its results encouraged people to think budgets aren't in lockdown mode. Revenues were up 12% to $8.37 billion returning a non-GAAP EPS of 48 cents a share, up 14%, against estimates of 46 cents on $8.35 billion.

On a GAAP basis EPS was 36 cents, up 36%, for a total net of $1.84 billion. Although there were no large deals, new software license revenues, a key metric, were up 17% to $1.5 billion. Analysts had predicted a 15% rise. The company's all-important software license updates and product support revenues were also up 17% to $4 billion.

Oracle co-president Safra Catz claimed "company-specific momentum." Despite the turmoil over there, European sales were up 60% in the quarter, an important number because Oracle gets 30% of its revenue from Europe.

However, hardware sales slouched 5% to $1 billion. Oracle still has faith though; it said it hired 350 salespeople in the quarter.

In a statement co-president Mark Hurd said, "Our high-end server business - Exadata, Exalogic and Sparc M-Series - delivered solid double-digit revenue growth in Q1. In contrast, revenue declined in our low-end server business. By moving away from low-margin commodity hardware and focusing on high-end servers, we increased our hardware gross margins from 48% to 54%. Our strategy to grow the profitable parts of our hardware business is paying off."

That means selling widgetry that's based solely on Oracle IP and that won't happen until fiscal year 2013, according to Oracle CEO Larry Ellison, when hardware should start showing top-line growth.

Meantime, he said, he doesn't care if "our commodity x86 business goes to zero." Oracle's not making any money selling other people's IP. He did not address Sun's server losses to competitors.

In a step towards Ellison's nirvana Oracle next week is supposed to announce a new high-performance Sparc microprocessor and a new high-end, Solaris 11-run, fault-tolerant server called a Sparc SuperCluster. Ellison said the new Sparc T4 chip is up to five times faster than the T3 part it replaces, and the new all-Oracle SuperCluster, engineered to use the T4 along with Exadata's flash and disk storage system, is supposed to be cheaper and faster than anything IBM's got. It'll apparently do data analysis in-memory.

Evidently Oracle is about to put out three other purely Oracle "engineered systems" at OpenWorld in a couple of weeks. The issue of unstructured data came up during the conference call, which gave Larry the chance to take out his switch blade and go for HP. He said Autonomy, the unstructured data company HP is buying, was shopped to Oracle and he was "shocked" by HP's "absurdly high" bid of $10.25 billion for the British software company.

He then explained that the Oracle Database hadn't been simply an RDBMS for 20 years and had absorbed object database methodology when it came along, then text search and XML, and now it's supposed to integrate unstructured data too and process it as well as Autonomy.

For its next trick the database will interface with anybody's Hadoop appliance and process the Big Data that Hadoop feeds it. After starting the widgetry six years ago Oracle is supposed to go GA with its Fusion apps by Christmas. Evidently Fusion already has 200 customers. Oracle is also going to start pushing CRM cloud apps (SaaS stuff like Salesforce) this quarter.

Oracle shares were tickled 3% after-hours after falling 2.3% during the day. It closed at $28.35. Nothing was said during the conference call about the court-ordered negotiations Ellison had Monday and Tuesday with Google CEO Larry Page to resolve Oracle's Java infringement suit.

Oracle guided to non-GAAP revenues up 4%-8% to $9 billion-$9.34 billion this quarter on new software license revenue up 6%-16% and hardware flat to down 5%. Non-GAAP profits should be 56 cents-58 cents a share. The Street figured revenues at $9.36 billion.

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
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.
CloudEXPO New York 2018, colocated with DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City and will bring together Cloud Computing, FinTech and Blockchain, Digital Transformation, Big Data, Internet of Things, DevOps, AI, Machine Learning and WebRTC to one location.
Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settlement products to hedge funds and investment banks. After, he co-founded a revenue cycle management company where he learned about Bitcoin and eventually Ethereal. Andrew's role at ConsenSys Enterprise is a mul...
Disruption, Innovation, Artificial Intelligence and Machine Learning, Leadership and Management hear these words all day every day... lofty goals but how do we make it real? Add to that, that simply put, people don't like change. But what if we could implement and utilize these enterprise tools in a fast and "Non-Disruptive" way, enabling us to glean insights about our business, identify and reduce exposure, risk and liability, and secure business continuity?
DXWorldEXPO | CloudEXPO are the world's most influential, independent events where Cloud Computing was coined and where technology buyers and vendors meet to experience and discuss the big picture of Digital Transformation and all of the strategies, tactics, and tools they need to realize their goals. Sponsors of DXWorldEXPO | CloudEXPO benefit from unmatched branding, profile building and lead generation opportunities.
DXWorldEXPO LLC announced today that Telecom Reseller has been named "Media Sponsor" of CloudEXPO | DXWorldEXPO 2018 New York, which will take place on November 11-13, 2018 in New York City, NY. Telecom Reseller reports on Unified Communications, UCaaS, BPaaS for enterprise and SMBs. They report extensively on both customer premises based solutions such as IP-PBX as well as cloud based and hosted platforms.
Digital Transformation: Preparing Cloud & IoT Security for the Age of Artificial Intelligence. As automation and artificial intelligence (AI) power solution development and delivery, many businesses need to build backend cloud capabilities. Well-poised organizations, marketing smart devices with AI and BlockChain capabilities prepare to refine compliance and regulatory capabilities in 2018. Volumes of health, financial, technical and privacy data, along with tightening compliance requirements by...
The deluge of IoT sensor data collected from connected devices and the powerful AI required to make that data actionable are giving rise to a hybrid ecosystem in which cloud, on-prem and edge processes become interweaved. Attendees will learn how emerging composable infrastructure solutions deliver the adaptive architecture needed to manage this new data reality. Machine learning algorithms can better anticipate data storms and automate resources to support surges, including fully scalable GPU-c...
To Really Work for Enterprises, MultiCloud Adoption Requires Far Better and Inclusive Cloud Monitoring and Cost Management … But How? Overwhelmingly, even as enterprises have adopted cloud computing and are expanding to multi-cloud computing, IT leaders remain concerned about how to monitor, manage and control costs across hybrid and multi-cloud deployments. It’s clear that traditional IT monitoring and management approaches, designed after all for on-premises data centers, are falling short in ...