Oracle Corp’s executive vice president Geoff Squire commented that the whole of Oracle was elated at the second quarter results that saw the company back in profit after its first quarter loss. However, whereas the old Oracle would have rested on its laurels for a few weeks, Squire says that he got straight on to planning and tracking the current month’s business. In the UK, Oracle recently announced 80 further job cuts (CI No 1,583) and in the US there may well be further job cuts to come as Squire turns his rationalising gaze to the Consulting Services Organisation. He says that as the emphasis changes from revenue growth to product delivery there will be some managerial fall-out. Oracle as a whole is developing a flatter organisational structure by stripping out layers of management and whereas Consulting Services is currently top-heavy with around 90 managerial positions, it will soon have about 25 managers – whether those excess managers will be reallocated within Oracle or will leave the company is unclear at present. However, those on Oracle’s technical staff should take comfort from the fact that the Oracle motto is never fire a tecchie after all he or she can always be deployed on a customer site. Despite confidence among senior Oracle staff that the financial storm has been weathered, analyst responses to the second quarter results were mixed. Squire said that most agreed that turning the company around from a loss of $54m to a pre-tax profit of $10m was quite exceptional, that revenue was as expected, but one analyst criticised the company for not having good expense control. Squire was clearly not impressed by this criticism, dismissing it on the grounds that redundancies cost money and the selling off of leases cannot be done immediately, therefore, it was unrealistic to expect expenses to be cut more quickly. Oracle is now working on 150 day receivables and says that the outlook for the rest of the financial year is profitable with expected cash breakeven in the third quarter and a cash positive position in the fourth quarter. Squire believes he will have reduced debt by 20% by year end on the back of a 20% to 25% revenue growth. By year end Oracle will have launched a new product in every product area – the launches are likely to include Oracle version 7.0, Oracle Card and the parallel server. These product launches will secure growth for 1992, but Squire dislikes the phrase positioning Oracle for strong growth. Oracle adopted a poison pill strategy as a precautionary measure against a takeover bid, but Squire says that nobody has approached the company with such a bid. As for the reorganisation that has been going on at the systems integration unit Oracle Complex Systems (CI No 1,557), Squire says that the changes – staffing levels are being reduced by 15% – are being made to integrate the unit more fully into the Oracle organisation, so that bids carry the full weight of Oracle, rather than the limited influence of an autonomous unit. Complex Systems is now being more tightly tied into Oracle Consulting Services. When asked how important systems integration is to Oracle, Squire replied that it is important, because without this capability Oracle is merely a low-value components supplier to whichever systems integrator wins the tendered contract. Having said that he grinned, adding that for every bid won, we lose 100 contracts, so we’re happy to play the components role as well.
