Oracle Corp produced solid growth in both its applications business and its core database business during the second quarter, leading to better than expected profits and a very bullish outlook from the Redwood Shores, California-based company. Net profits jumped 46% to $274m while revenues were up 27% at $2.06bn for the three months through November. Breaking these figures down, worldwide license growth for databases was 26% while application licenses grew by 19%. Services growth came in at 33%. License growth was the best we’ve seen in six quarters, and we’re very pleased, said Jeffrey Henley, chief financial officer. The database business is alive and well – I hope everyone can see that, he said. Ray Lane, Oracle’s chief operating officer, told listening analysts that the whole company had wrapped around the release of Oracle 8i and Release 11 of Oracle’s enterprise applications. They’re simple and they’re here – it’s a sales force’s dream, he said. Behind the 19% worldwide growth in applications was a more impressive 31% growth for the Americas. Henley said this boded well for adoption rates worldwide because the US release came three months ahead of Europe. Ray Lane said he expected excellent results from Europe once Release 11.5, with more European specific content, becomes available in June 1999. Lane said the key growth drivers in the market continued to be datawarehousing and the enterprise resource planning phase or craze but that e-commerce was becoming the defining factor as to why people choose Oracle. Oracle’s sales force have been pushing Oracle’s claim to be the power behind Ten of the top ten consumer e-commerce web sites, due to 8i’s in-built internet compatibility. Asked about the widely touted threat of a ‘Nuclear Winter’ for ERP vendors as customers freeze IT spending in the run up to the year 2000, Lane predicted the freeze would hit about a third of our customers in the second half of 1999. Others, he predicted, would not be budget constrained, but would certainly not be planning to go live with any new ERP packages in the second half of the year. Lane predicts that those vendors selling purely financial packages would be worst hit while Oracle, he claimed, would continue to sell single, point solutions to individual departmental managers. Companies are not going to spend $50m in 1999 on an integrated application, he said. In terms of the competitive landscape, Lane said SAP was becoming increasingly aggressive in its pricing and sales tactics, offering far reaching guarantees on implementation times to win business. I don’t know if I want to use the word desperate … but something’s not right, he said. JD Edwards apparently is causing more problems for Oracle while, Baan just kind of evaporated – I have not seen Baan this quarter, said Lane. á
