Oracle’s revenues fell during the company’s first quarter of its fiscal 2013 year, but with new efforts in the pipeline, the outlook is looking up – to the clouds.
Late Thursday, Oracle reported first quarter 2013 revenues of $8.2 billion, which is a two percent year-over-year decline. Net Income went the other way, rising 11 percent to $2.0 billion.
Looking forward, it is the software and cloud business at Oracle that is set fuel future growth, as the hardware business continues to compress.
Oracle CFO Safra Katz said during the company’s earning call that for the second quarter of 2013, she expects hardware product revenue growth to be in a range from a negative 18 percent to a negative 8 percent. In contrast, new software license and cloud subscription revenue is expected to range from 5 percent to 15 percent.
Oracle CEO Larry Ellison used his company’s earning call as the platform to announce his company’s latest cloud offering. At Oracle’s upcoming OracleWorld event, Infrastructure as a Service (IaaS) will be added to Oracle’s Cloud services.
“With that addition, Oracle will be providing its customers with all 3 tiers of cloud computing: Software as a Service, Platform as a Service and Infrastructure as a Service,” Ellison said during the earnings call.
Oracle’s SaaS services include CRM and HCM while the PaaS platform provides Java and database services.
“Our new Infrastructure as a Service offering provides secure, virtualized, compute and storage services,” Ellison explained.
The IaaS offering can be provisioned inside of the Oracle Cloud or as a private managed service inside of a customer’s own data center. Ellison noted that customers can move their applications back and forth between the Oracle Cloud and their own private cloud.
During the earnings call, Ellison was asked about what he thinks Oracle needs to do to win the cloud market. Ellison’s view is that it’s all about dealing with and planning for transitions.
“A lot of companies have a difficult time adapting to the next generation of technology, and those with the most are also the ones with the most to lose,” Ellison said. “You have to be willing to change the way you were doing business in the past and adapt to the new opportunities and exploit the new opportunities.”
Ellison noted that Oracle began to build its Fusion Application Suite for the cloud seven years ago. At that time, the term cloud didn’t exist and the effort was simply known as Software-as-a-Service.
“There’s a lot of inertia in a big company, we have 120,000 employees, and it takes a lot of management focus to move people from business-as-usual to pursue these new opportunities,” Ellison said. “That means retraining and doing things differently. It’s not easy, but it’s essential. “