Oracle Results – No Surprises!

Oracle pre-announced good Q4 results highlighted by 27% constant currency growth of new software application licenses. Oracle (ORCL) also hit overall application revenues run rate of $ 4Bn for the first time ever.

In addition to this, Cloud based bookings have been at the highest at $ 1Bn making Oracle the 2nd largest SAAS applications vendor in the market. The new applications license growth has been broad based indicating customers are increasingly preferring out of the box functionalities for a quicker IT turnaround with multiple deployments and pricing models. The applications growth is also a leading indicator of what lies ahead for the integration and services business; and despite the tougher macro-economic scenario, customers seem to be focusing on business and buying IT aggressively to expand or optimize.

Also, recent surveys from industry analysts point to the fact that Administrative ERP (financial management systems and human capital management) has been growing at 13% with emerging regions like Latin America, Asia Pac outpacing North America two or three times.

The Oracle Q4 results and positive guidance for application growth in Q1 FY13 was thus not surprising. Many believed that Oracle was slipping in its aggressiveness to compete with niche applications vendors, mainly in North America, and that its cloud story was weaker. However, Oracle knows what it can do better than most others – integrating acquired assets and bringing them to market quicker. This single advantage also means that Oracle can afford to wait and watch before jumping into niche areas. FY13 does promise to be a very interesting year to see how the overall Oracle story plays out, especially with regard to growth in Oracle Fusion Applications adoption and Engineered Systems.

About the Author

Biplab is a Managing Partner at Wipro Ventures and serves as a board observer for Altizon Systems, Demisto, IntSights and Tricentis.

Prior to this position, Biplab held several operating roles, primarily in the enterprise applications services domain at Wipro, Genpact, and PwC. He earned a bachelor's degree in computer science and engineering from IIT Kharagpur, and an MBA with concentration in finance and systems from IIM Bangalore, India. He is a certified Six Sigma Green Belt and a Kauffman Fellow.

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