ChannelLife New Zealand logo
Industry insider news for New Zealand's technology resellers
Story image

Oracle says cloud is great as earnings plummet

By Heather Wright
Fri 19 Jun 2015
FYI, this story is more than a year old

Oracle’s senior management talked up the company’s cloud business as the vendor reported weaker than expected revenue in its latest financial results, laying the blame for the results on the strengthened US dollar.

Their efforts to talk up the company’s cloud business didn’t cut it with Wall Street, however, with some analysts suggesting that the stronger dollar wasn’t enough to account for the weaker than expected results. Shares too, took a tumble in after-hours trading, dropping 6.5%.

Revenue for Q4 was down 5% to $10.7 billion, though Oracle says it would have been up 3%, without the strengthening of the US dollar. Net income meanwhile, plunged 24% year on year, to $2.8 billion.

Overall software and cloud revenues were down 6% to $8.4 billion. Software-as-a-service (SaaS) and platform-as-a-service revenues (PaaS) were up 29% to $416 million, while infrastructure-as-a-service revenues were $160 million, up 25%.

Hardware systems revenue was at $1.4 billion, down 4% ‘but up 5% in constant currency’.

Safra Catz, Oracle co-chief executive, says the company sold ‘an astonishing $426 million of new SaaS and PaaS annually recurring cloud subscription revenue in Q4.

“We expect our rapidly increasing cloud sales to quickly translate into significantly more revenue and profits for Oracle,” she says.

“For example SaaS and PaaS revenues grew at 34% constant currency rate in our just completed Q4, but we expect that revenue growth rate to jump to around 60% in constant currency this new fiscal year.”

Mark Hurd, Oracle co-chief executive, says “As our multi-billion dollar cloud business gets bigger, our SaaS and PaaS revenue growth rates are on their way up to 60% in constant currency. Compare this to our primary cloud competitors’ whose own revenue growth forecasts are on their way down to 44% and 22%.”

Larry Ellison, Oracle executive chairman and CTO, also talked up the company’s cloud business, saying it expected to book between $1.5 and $2.0 billion of new SaaS and PaaS business this fiscal year.

“That means Oracle would sell more new SaaS and PaaS business than salesforce.com plans to sell in their current fiscal year – the only remaining question is how much more,” Ellison says.

“Oracle’s planned SaaS and PaaS revenue growth rate is around 60% in constant currency; salesforce.com has a planned growth rate of around 20%.

“When you contrast those growth rates it becomes clear that Oracle is on its way to becoming the world’s largest enterprise cloud company.”

Cloud still small business

Despite the bravado – and indeed genuine increases in SaaS and PaaS business for the company – the fact remains that SaaS and PaaS accounted for just 4% of revenue for Q4. Infrastructure-as-a-service, just 1%.

The vast bulk of the Oracle’s business at this point is in traditional software sales, updates and support, which account for 73.1% of Oracle’s $10.7 billion overall Q4 revenue.

That’s an area of the business that Oracle executives didn’t dwell on in their financial release. Sales of new software licenses were down 17% to $3.1 billion for the quarter while software license updates and product support saw a marginal drop from $4.9 billion to $4.7 billion.

The full year results were less grim, with new software licenses down 9% to $8.5 billion, and license updates and support up 4% to $18.8 billion.

Hardware offers no salvation either, with both hardware systems products sales down 6% to $818 million and systems support down 1% to $589 million.

Rounding out the picture was services revenue, down 4% for the quarter to $899 million.

Overall revenue for the full year was flat at $38.2 billion.

The financial results highlight the difficulties faced by traditional software companies such as the global database behemoth as they struggle to reinvent themselves in the face of rising cloud demand.

In an analyst call after the results Ellison noted that cloud services, while a good business for Oracle, take time to bring in the money, with subscription fees instead drip fed over an extended period.

Related stories
Top stories
Story image
Privileged Access Management / PAM
The importance of stopping identity sprawl for cybersecurity
The 2021 Data Breach Investigations Report (DBIR) shows that 61% of all breaches involve malicious actors gaining unauthorised, privileged access to data by using a compromised credential. Unfortunately, it is often too late when the misuse of a credential is detected.
Story image
Ingram Micro
Ingram Micro NZ sees $74 million revenue growth in 2021
Ingram Micro New Zealand's latest financial report reveals that its revenue from contracts with customers increased by almost $74 million in 2021.
Story image
SaaS
Cloud and data protection big challenges for NZ businesses
"This surge towards a cloud-first approach meant security and safety became afterthoughts - there's no point being the fastest car on the racetrack if you crash.”
Story image
Developers
Snyk announces plans to expand partner network in APJ
Recognising that partnerships are critical for growth, Snyk is building an entire partner ecosystem that will drive its expansion across APJ.
Story image
Dicker Data
Dicker Data brought on as Acronis partner for A/NZ
The news about the partnership comes in as cyber criminals continue to exploit gaps in traditional solutions and strategies in NZ and across the APAC region.
Story image
Red Hat
Red Hat announces 2022 awards winners for A/NZ region
Red Hat recently acknowledged Australia and New Zealand partners with its annual awards, highlighting partners across various categories.
Story image
Financial results
Jade Software’s plan to get back to surplus in 2022
Jade Software has released its latest financial report, revealing that the company has kept its loss low from $567,000 in FY 2020 to just $153,000 in FY 2021.
Story image
SaaS
Claroty launches new cloud-based industrial cybersecurity platform
The company says Claroty xDome is the industry's first solution to deliver the ease and scalability of SaaS without compromising on visibility, protection, and monitoring controls.
Story image
Artificial Intelligence
Exclusive: NZ-based DEFEND offers global cyber protection
DEFEND supports customers in 66 countries across the globe with a relentless focus on ensuring that every dollar spent on security provides a meaningful return on investment and reduces cyber risk.
Story image
Sustainability
NZ program recovers and recycles more than 177 tonnes of e-waste
The TechCollect NZ pilot program says its milestone of recovering and recycling more than 177 tonnes of ICT e-waste recognises the efforts of many.
Story image
Web application firewall
Radware recognised in KuppingerCole’s 2022 Leadership Compass report
Radware has been named a Product, Innovation, Market and Overall Leader in the 2022 KuppingerCole Leadership Compass report for Web Application Firewalls.
Story image
Tech job moves
Tech job moves - Cohesity, Equinix, IDC, Proofpoint & Xero
We round up all job appointments from July 29 - August 5, 2022, in one place to keep you updated with the latest from across the tech industries.
Story image
Identity and Access Management
Pitney Bowes launches rebranded digital visitor management offering in A/NZ
Pitney Bowes has launched Smart Access Management (SAM), its rebranded digital visitor and contractor management offering in Australia and New Zealand.
Story image
Home Entertainment
Hands-on review: TCL 65″ C835 Mini LED 4K Google TV
We introduce you today to a TV that brings the height of immersion to your viewing experience: The TCL 65″ C835 Mini LED 4K Google TV.
Story image
10 Minute IT Jams
Video: 10 Minute IT Jams - An update from Heidrick & Struggles
Graham Kittle joins us today to discuss how the company is helping organisations bring about change within their business.
Story image
Tablets & laptops
Hands-on review: Xencelabs Graphic Display Tablet
Xencelabs seemed to show up out of nowhere on the market. I had no idea who they were or what they were about, but I was very intrigued.
Story image
Wireless
Wave Audio spices up portfolio with first ever party speaker
Australian-based pioneers Wave Audio are enhancing their extensive range of groundbreaking new audio products by adding one of the most versatile speakers on the market to their growing portfolio.
Story image
Financials
Google NZ numbers show strong comprehensive profit increase
The latest financial report from Google New Zealand Limited has revealed an increase in total comprehensive profit of over $NZD 7 million.
Story image
Gaming
Chorus announces Hyperfibre sponsorship deal with NZ Esports
Chorus has put its support behind New Zealand's Esports community with a newly announced three-year Hyperfibre sponsorship deal with NZ Esports.
Story image
Microsoft
Spectralink DECT devices now integrated with Microsoft Teams SIP Gateway
Spectralink DECT devices are now integrated with Microsoft Teams SIP Gateway to help create better results for business-critical frontline workers.
Story image
Compliance
Why security needs to shape your journey to the cloud
It's estimated that 80% of workloads could be in the cloud in the next few years. How can you make all that data secure?
Story image
Mergers and Acquisitions
Netskope acquires Infiot, delivers integrated SASE platform
Converged SASE platform provides AI-driven zero trust security and simplified, optimised connectivity to any network location or device, including IoT.
Story image
Enterprise
Fortinet reports second quarter 2022 financial results
“We delivered strong revenue and billings growth in the second quarter driven by an increase in the number of transactions larger than one million dollars."
Story image
Gigabit
Keysight Technologies and Nokia’s public test of 800GE success
Keysight and Nokia have successfully demonstrated the first public 800GE test, validating the readiness of next-generation optics for service providers and network operators.
Story image
Wireless
Hands-on review: James Donkey RS4 Knight Wireless Gaming Keyboard
I have always liked mechanical keyboards, and this is no exception. I find the action much easier to use than the modern keyboards with limited travel.
Story image
Tablets & laptops
Chromebook and tablet shipments see another rapid decline for the year
According to research from Canalys PC Analysis, Chromebook and tablet shipments have fallen for the fourth quarter in a row for Q2 of 2022.
Story image
Data Protection
Video: 10 Minute IT Jams - An update from SearchInform
Alexey Pinchuk joins us today to discuss the role the company plays in helping organisations manage risk and provide better security outcomes.
Story image
Apple
2degrees unveils eSIM functionality for selected devices
2degrees has enabled eSIM functionality to work with a variety of Apple, Samsung and Oppo devices, including a range of iPads.
Story image
Document Management
TrustRadius gives M-Files two document management awards
TrustRadius has recognised M-Files with both a 2022 Best Feature Set and a 2022 Best Relationship award in document management.
Story image
New Zealand
2degrees announces appointments to newly established board
2degrees has announced Liz Coutts as the board chair, while Russell Stanners and Kathy Meads join her as directors.
Story image
Inde
Exclusive: Inde provides innovative solutions across the tech sector
Inde likes to call its approach the 'power of the collective', which essentially means that if a client approaches the company with a problem, they'll get the team's collective insight to help drive the best outcome.
Story image
Phishing
Norton research finds NZ threat landscape diversifying on social media
Norton's quarterly report has highlighted the seriousness of the threat landscape in New Zealand.
Story image
Economics
9 in 10 retailers prepared for economic challenges this year
Some 9 in 10 retailers (86%) are prepared for continued inflation, higher interest rates and potentially lower consumer spending, according to new research.
Story image
Customer
OfficeMax NZ sees significant growth through Seismic partnership
OfficeMax New Zealand has announced it has seen a significant increase in customer and sales confidence as a result of Seismic’s digital enablement software.
Story image
Firewall
Fortinet unveils compact firewall for hyperscale data centres, 5G networks
"Fortinet’s dedication to pushing the boundaries of what is possible in security performance has yielded the most powerful compact firewall yet."
Story image
Gaming
Attacks on gaming companies more than double over past year
The State of the Internet report shows gaming companies and gamer accounts are at risk, following a surge in web application attacks post pandemic.
Story image
Neat
Workplace design a crucial factor for better employee experience - report
The key to a successful workplace could be its design, according to research from Ecosystm and Neat.
Story image
LG Electronics
LG Electronics’ revenue in NZ grows by 57% in FY 2021
The New Zealand branch of LG Electronics Australia's total revenue shot up by nearly NZD $45 million reaching a total of $123.7 million for FY 2021.
Story image
Hybrid Cloud
The essential guide to digital transformation by SolarWinds
Digital transformation is a buzzword thrown around all the time by companies, but what does it actually mean and why is it important? SolarWinds breaks it down.
Story image
Wireless
Wave Audio delivers ultimate immersion with new wireless earbuds
Wave Audio, one of Australia's best new audio brands, has recently released a set of landmark noise-cancelling true wireless earbuds, the Immersive Pro.
Story image
Financial results
Facebook NZ financial report reveals notable revenue increase
Revenue from contracts with customers increased by $NZD 1,089,292 compared to 2020's figures.