With OpenWorld only a weekend away Oracle (news, site) couldn’t have gone into it on a higher note than the publication of its Q1 earnings that showed a 20% increase in net income and a 48% rise in revenues.
That translates into profits of US$ 1.4 billion, up from US$ 1.1 billion on the same quarter last year with revenues jumping to US$ 7.5 billion over the same period. The figures also show that nearly half of its revenues come from companies outside the US.
Oracle, Sun and Hurd
While this is all very good for shareholders, for the majority of those listening Thursday’s earnings call it was always going to be about Mark Hurd and his new role as sales, marketing and customer relations supremo after leaving HP (news, site) early this month.
Obviously, Oracle and Larry Ellison had decided to keep their powder dry for OpenWorld next week, but there was a tantalizing glimpse of a couple of things that will be coming up during the conference even though details on those things were kept close to his chest.
The first thing, and one that has had both Oracle-watchers and competitors scratching their heads since the deal was closed last January, is how Oracle is going to incorporate Sun in the future.
In April, there were some indications of where Oracle was going with it with the release of Enterprise Manager (EM) 11g, which Oracle said at the time would be one of the keys in integrating the two, building on the idea of a complete technology stack with everything from databases to applications.
And interestingly it was Hurd who made the play.
Next week at Oracle Open World we will announce two new high-end systems that combine Sun hardware with Oracle software,” he said.
And that’s as far as Oracle went on that, but enough to whet appetites for what will be Hurd's first public presentation since he moved to Oracle, which will take place on Monday and one in which further details of the new systems might finally come to light.
Larry Ellison also gave some indication of what he is looking for from Sun and said during the earnings call that Oracle would be dropping unprofitable products from Sun, with the goal of increasing margins to as high as 60%, up from current margins of 48%.
He also promised that he would unveiling a whole pile of new products, but he too remained tight lipped on what those products would be and didn’t explain whether the products in question were the same ones Hurd was referring to.
Other than that for interesting news outside of the financials, Hurd has also provided what should be one of the headliners at the conference. While not going into any details he said they would be outlining next week where the US$ 4 billion research-and-development budget would be spent.
However, for this week the figures remain the stars of the Oracle show. During the earnings call, apart from revenues and net income, it also indicated that sales for Q1 should total US$ 8.4 billion with US$ 1.7 billion coming from hardware.
Software license sales, generally regarded as an indicator of company overall performance and future revenues, rose 25% to $1.29 billion. This includes US$ 937 million in database and middleware licenses and business application revenues of US$ 349 million.
For the future Ellison also said he would be recruiting 2000 new sales people to deal with predicted increase in business created by the momentum of the Sun and Oracle combination.
He also said that they would be looking at ways to improve Oracle software so that they would be able to cut down on the need for IT services provided by companies like IBM (news, site) and Accenture (news, site).
Upbeat Predictions for Q2
So while everyone looks forward to see what might be coming out of OpenWorld next week, on Wall Street Oracle is everybody’s darling and looking into the second quarter it doesn’t look like it’s going to change.
Oracle president Safra A. Catz said that even Oracle was pleased:
Our hardware business also grew faster than we expected with Sun Solaris servers and Exadata leading the way.”
Based on that, she is also predicting that Oracle’s revenue would rise by as much as 47% over the same period last year when it posted sales of US$ 5.9 billion.
Seems unlikely that Oracle will be able to go through the four days of OpenWorld next week without bringing up the Q1 figures. If they do, we’ll be there.