Ellison: Oracle is nailing Salesforce and Workday in cloud

Oracle founder claims it will not be long before it overtakes Salesforce in SaaS and PaaS space despite latest results showing fall in revenue

Larry Ellison has claimed Oracle will soon overtake rival Salesforce in cloud revenues, despite the US giant seeing revenues fall in its latest financial results.

"This year, in FY 2016, we plan on selling between $1.5bn (£940m) and $2bn of new SaaS and PaaS business. In other words, we plan to sell at least twice as much as we sold last year," Ellison, Oracle's executive chairman and CTO, said on an earnings calls transcribed by Seeking Alpha.

"And that's at least 50 per cent more new business than Salesforce.com will sell in their current fiscal year," he added.

"Our cloud SaaS and PaaS revenue is still second to Salesforce.com but we are growing much much faster than they are. So it won't be long before we pass them."

Ellison (pictured) was equally bullish on cloud ERP competitor Workday, claiming Oracle is "winning" in this market.

"Our cloud service – our cloud business, is much bigger than Workday and we will grow faster than Workday will this year," he said.

"Workday says they never see SAP in the cloud ERP market. That's the one thing Oracle and Workday agree on. It's between us – Oracle and Workday – in the mid-market and high-end cloud ERP market and we are winning big time."

Despite these claims about rivals, Oracle saw its profits and revenues fall year on year for its latest quarter.

For Q4 2015, Oracle's net income was down 28 per cent year on year at $2.8bn, on revenues of $10.7bn, which were down five per cent over the same period.

But Oracle claimed these results were "significantly impacted by the strengthening of the US dollar", and the company said revenues would have been up three per cent without currency headwinds.

These results were boosted by strong revenue growth in Oracle's SaaS and PaaS businesses, which were up 29 per cent and 35 per cent respectively, in constant currencies, to total $416m.

While for Oracle's whole fiscal 2015, revenues were flat at $38.2bn, but up four per cent in constant currencies.

Cloud domination

Echoing Ellison's bullish comments, Oracle's chief executive Safra Catz claimed the US giant is outdoing its competitors across the cloud market as a whole.

"This is the first Q4 where we had everything together for the cloud. We had the products that we've been working on for a decade, the operations, the sales force and the references with many, many happy customers," Catz said.

"Having all that in place caused SaaS and PaaS bookings to grow more than 200 per cent, our best-ever growth rate for cloud bookings and more than $125m higher than our own $300m goal."

Catz claimed that Oracle's cloud billings, calculated using its competitors' methodology, were up more than 70 per cent year on year for Q4 2015, and she compared this with "Salesforce's 21 per cent billings growth and Workday's 31 per cent billings growth in their most recently reported quarter".

"In summary, our cloud business is significantly outpacing the competition," she added.