Oracle revenue boosted by strong cloud growth
Fri 19 Dec 2014
Oracle has reported strong growth with $9.6bn in revenue over the second quarter of the 2014/15 fiscal year, and a 45 percent increase for its cloud services, equating to $516mn.
The Redwood City-based tech firm, which offers software as a service (SaaS), platform as a service (PaaS) and infrastructure as a service (IaaS) as part of its cloud portfolio, announced that this area of its business had made up 5.4 percent of its total takings in the second quarter.
The software giant also reported that its hardware sales had risen by one percent, totalling $1.3bn. Since its acquisition of Sun Microsystems in 2009, Oracle’s hardware business had been regarded as a burden on its overall finances. However, since the third quarter of the 2013/14 fiscal year, the firm has seen an increase in revenue growth in this sector.
CEO Safra Catz said that Oracle would continue to produce “industry-leading operating margins and cash flow”, despite bolstering its significant workforce with thousands of additional sales people and engineers, specialised in cloud technologies.
Oracle co-CEO Mark Hurd also announced that cloud deals in the second quarter had grown at a rate of over 140 percent, despite heavy competition from rivals such as Salesforce.com and Microsoft. “We now have more than 600 enterprise resource planning (ERP) Fusion Cloud customers […] five times more ERP customers than Workday,” he said.
“Oracle has been going through a transition as it rationalises the hardware business and moves their software business to the cloud […] This is good evidence that they’re making some progress there,” explained Pacific Crest Securities analyst Brendan Barnicle.
In a statement, Larry Ellison, Oracle chairman and CTO said that by the final quarter of this fiscal year, the company’s new cloud deals are expected to reach more than $250mn. “Next fiscal year our new cloud bookings will be well over the billion dollars mark,” added Ellison.