Oracle breaks cloud revenue barrier but hardware stutters

Quarterly revenue breaks $1bn barrier for the first time, but hardware sales drop 10 per cent

Oracle's cloud revenue surged to over $1bn (£802.5m) in Q2 but declining hardware sales kept overall revenue growth flat.

Oracle saw its cloud revenue for the three months ending 30 November rise 62 per cent year on year to $1.1bn, the first time it has passed the $1bn mark in a single quarter, while hardware revenue dropped 10 per cent to $1bn.

Overall, Oracle's year-on-year revenue stayed flat at $9bn.

On a conference call, transcribed by Seeking Alpha, Catz teased changes to the firm's hardware business, but remained coy on future plans.

"Just so that you know, we are proactively evaluating our expense infrastructure needed to support the on-premise hardware business in light of on-premise hardware revenue declines and the new availability of IaaS for their customers," she said.

When an analyst on the call sought to dig deeper into Oracle's hardware intentions - saying that not a lot of time had been spent talking about hardware on the call - Katz left the question for co-CEO Mark Hurd who chose to focus on growth in the engineering arm of the company.

"Sort of the reason we haven't talked about it much - we had a very good engineered systems quarter again," he said.

"Engineering systems grew and in both bookings and revenue in the quarter that ecosystem continues to be very successful, very profitable for us.

"We had declines in what we think of as our traditional server business and those declines offset the growth in engineered systems, so it's really the tale of two product lines - engineered systems growing, the traditional server product lines declining."

Trump transition team

In other Oracle news, CEO Catz has joined US president-elect Donald Trump's transition team. The news comes soon after Trump met tech leaders at his New York headquarters, according to Reuters.

Catz joined Microsoft CEO Satya Nadella and Apple boss Tim Cook, among others, in a meeting with Trump seen as his attempt to rebuild bridges with Silicon Valley after a fractious presidential campaign.

Catz will remain in her current role at Oracle.