Oracle, led by its steady software sales, turned in an upbeat earnings report Sept. 20, showing gross and net income up for the most recent sales quarter.
The database, middleware and data center hardware company reported that its fiscal first-quarter 2012 total revenues were up 12 percent to $8.4 billion over the same period a year ago. Software licensing, both new and recurring, led company sales with about $5.5 billion of that total; license updates and product support revenues increased 17 percent to $4.0 billion, while new software license revenues were up 17 percent to $1.5 billion.
Net profit was up 36 percent for the quarter to $1.8 billion.
Oracle’s hardware systems revenues were down 5 percent to $1.0 billion. First-quarter earnings totaled 48 cents a share, beating the average estimate of 47 cents of Wall Street analysts.
Lagging sales of Oracle’s low-end servers and other hardware were the prime reason for the drag on the hardware numbers, Co-president Mark Hurd told a conference call of analysts, journalists and shareholders.
“Our high-end server business–Exadata, Exalogic and SPARC M-Series–delivered solid double-digit revenue growth in Q1,” Hurd said. “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 percent to 54 percent.”
High-end servers and storage arrays are becoming more instrumental in handling so-called big-data-type workloads, which are choking more and more IT systems as time goes on.
CEO and co-founder Larry Ellison said, in answer to a question about Oracle’s approach to big data workloads, that “big data is just one of the feeder systems into the Oracle database. We have announced new interfaces that allow you to take your Hadoop system and connect them to Oracle systems, so you can load your data into Oracle. This will just increase the usage of Oracle.”
To read the original eWeek article, click here: Oracle Software Licensing Sparks Upbeat Earnings Report