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Larry Ellison: Oracle Is ‘Focused on Our Star Products’

Blog: Oracle BPM

When Oracle announced its fiscal year financial results on June 19, Chairman and CTO Larry Ellison made it clear that the company has fast-growing products and fast-shrinking products—and that’s just fine by him.

“We’re focused on our star products, and our star products are now driving our top line higher,” Ellison said.

Some of the biggest stars are Oracle’s Autonomous Database, its Fusion ERP and human capital management cloud applications, and its NetSuite cloud application suite. Shrinking businesses include some on-premise hardware products.

“You have these very modern businesses…growing very rapidly, taking share, clear #1s in the overall marketplace,” Ellison said. “And you have these other businesses that are melting away, and we just don’t care.”

Cloud Apps and Autonomous Database

For example, for its 2019 fiscal year ended May 31, Oracle’s Fusion ERP and HCM cloud applications revenues grew 32%, and its NetSuite revenue grew 32%.

Autonomous Database, launched last year, is Oracle’s newest star product. Oracle executives pointed to several indicators of companies’ interest in that cloud database service, which takes care of such tasks as encrypting the data and upgrading, tuning, backing up, and patching itself without human involvement, thus lowering costs and reducing errors.

Ellison said Oracle added more than 5,000 Autonomous Database trials in Q4. And it saw very rapid growth in Q4 for the key database options needed to run Autonomous Database, which runs on Oracle Cloud Infrastructure. It can back up or patch itself while it continues to run, with no need for scheduled downtime or human intervention. “No other cloud infrastructure provides anything close to these autonomous features,” Ellison said.

Ellison also described how, in its data centers, Oracle can look at the extent to which customers are using its cloud services, and those usage patterns help the company gauge the success of a product launch such as Autonomous Database. That’s much different from the traditional approach of relying entirely on sales forecasts from the field.

Ellison said he’s encouraged by what he’s seeing. “The things that I find fascinating are the consumption data curves which show our consumption rate growing much faster than the field is currently anticipating,” he said. “To me, that’s just wonderfully encouraging, and hopefully, this is the beginning of a trend. We’ll find out soon.”

Financial Results

Oracle posted total revenue for the fiscal year of $39.5 billion, slightly higher in US dollars and up 3% in constant currency compared with the prior fiscal year.

For its fourth quarter, Oracle reported revenue of $11.1 billion, up 1% in USD and up 4% in constant currency compared with the year-ago quarter. Net income in the quarter rose 14%, to $3.7 billion.

In the fourth quarter, Oracle’s cloud license and on-premises license revenue grew 12% in USD and 15% in constant currency, with the technology segment that includes database licenses showing particularly strong growth. Oracle’s BYOL (Bring Your Own License) program lets companies buy software licenses that they can use on premises, in the cloud, or in a hybrid environment.

“As our customers adopt our technologies, whether via licenses or cloud services, our overall customer base is growing and that growth is starting to accelerate,” CEO Safra Catz said.

In focusing on Oracle’s applications business, CEO Mark Hurd noted that the company is having particularly strong success because, with both Fusion and NetSuite, it can offer cloud-based back-office applications as a single suite. That’s important because companies want processes such as financials and human resources to work well together, Hurd said. And for NetSuite in particular, he noted that the opportunity to grow internationally is strong because it has just started to expand its non-US sales force and marketing efforts.

While Oracle posted strong growth in Fusion and NetSuite revenues, “I won’t tell you everything is perfect, which is really good news,” Hurd said. “With these numbers, we can do better, and I think we’re just getting our stride.”

Safe Harbor Disclaimer: Statements in this article relating to Oracle’s future plans, expectations, beliefs, intentions, and prospects, including statements regarding the growth of Oracle’s customer base, the growth of the Autonomous Database consumption rate and NetSuite’s opportunity to grow internationally, are “forward-looking statements” and are subject to material risks and uncertainties. Many factors could affect Oracle’s current expectations and actual results, and could cause actual results to differ materially. A discussion of such factors and other risks that affect Oracle’s business is contained in Oracle’s Securities and Exchange Commission (SEC) filings, including Oracle’s most recent reports on Form 10-K and Form 10-Q under the heading “Risk Factors.” These filings are available on the SEC’s website or on Oracle’s website at http://www.oracle.com/investor. All information in this article is current as of June 19, 2019, and Oracle undertakes no duty to update any statement in light of new information or future events.

 

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