Four takeaways from Oracle's Q2 results

Vendor plans to move its share of the database market to its cloud, reports bright future for ERP market and takes jabs at Amazon

Oracle beat analyst forecasts for its second quarter results. CRN rounds up the four key takeaways from its earnings call, transcribed by Seeking Alpha.

Overall revenue remains stagnant - but beats analyst forecasts

Oracle reported total revenue of $9.6bn for the quarter, level with the same period last year. However, it is still $40m more than what Wall Street was predicting and caused the vendor's share price to rise 3.8 per cent from $45.75 to $47.50 in after-hours trading.

Cloud service and licence support revenue accounted for almost 70 per cent of total revenues, reaching $6.6bn in revenue - a five per cent increase on the previous period.

Moving to the cloud

Chairman and CTO Larry declared during the call that it plans to move its 50 per cent share of the database market to its public cloud, which in turn will quickly scale its share in infrastructure-as-a-service (IaaS).

Ellison was full of braggadocio on the call, stating that: "Technology analysts also believe that Oracle's new Autonomous Database gives Oracle the largest technology lead we've ever enjoyed over our database competitors since we entered the database market almost four decades ago."

He also told investors that he expects the combination of its autonomous database with its new generation cloud infrastructure to increase Oracle's share of the database market beyond 50 per cent.

"That means millions of Oracle database will move to the Oracle Cloud," he said on the call.

"Those are the two strategic initiatives that we are focused [on]. One, continue to expand our market leadership in cloud enterprise resource planning (ERP), which should make us the world's largest cloud application company.

"And two, maintain our database technology leadership and migrate our 50 per cent database market share to the Oracle Cloud."

Bites at Bezos

When quizzed by investors during the Q&A, Ellison didn't hold back in his summation of the current cloud landscape, calling out Amazon Web Services (AWS) for a number of perceived weaknesses.

"There is a wonderful Gartner report that ranks the technology," he told investors.

"They work all database technology, Oracle ranked with a huge number one lead by Gartner. A distant second is Microsoft. A distant third is IBM.

"And ridiculously distant for us is Amazon who is making all the noise. We think we have a huge technology leadership in database over Amazon.

"Amazon Aurora is just my sequel Open Source, and Amazon Redshift is also just a borrowed Open Source system.

"These are very old systems that Amazon took and gave them an Amazon name and put them on the Amazon Cloud."

The chairman, who is perhaps still smarting from a few jibes sent his way from AWS CEO Andy Jassey at its re:Invent event last month, criticised the slow progress its rival is making in migrating onto its own database.

"Jeff Bezos gave the command "I want to get off the Oracle database"," Ellison said.

"They've been working on this for a few years to try to get off the Oracle database and get on to the Amazon databases. It's taken Amazon - who is dedicated to doing this - several years and they are not there yet.

"[That's] why nobody else is going to go through that forth march - to get to go on to the Amazon databases - if Amazon can't even get there without this effort."

ERP leaders

Co-CEO Mark Hurd reported 32 per cent growth in its two ERP businesses, NetSuite and Fusion, with 6,000 and 16,000 customers, respectively. He cited this as an example of the company's leadership in ERP.

"Oracle is the clear leader in cloud ERP," Hurd declared.

"ERP has always been the largest segment of the enterprise applications business, so we have lots of room to grow as customers migrate from their traditional on-premise ERP to the Oracle Fusion ERP cloud."

"When we combine ERP and autonomous database…we can get into close to $1bn worth of growth next year out of those two solutions," Hurd told investors.

"I'm not giving you the number, I'm telling you that that opportunity for us in scale."