SaaS and PaaS sales climbed sharply, but revenue and profits were down
Oracle reported its fourth consecutive quarter of declining revenue on Tuesday, as rapid growth in its cloud business failed to offset the tepid demand for more traditional products.
Oracle said sales of its cloud services jumped 40 percent in the quarter ended Feb. 29, to $735 million, led by its platform-as-a-service and software-as-a-service offerings.
But those cloud services accounted for only 8 percent of its overall business, and when it came to the hardware and software that customers install in their own data centers, the picture was less rosy.
Sales of Oracle’s on-premises software, including its database and ERP products, fell 4 percent from last year to $6.3 billion, the company said. Hardware sales fell 13 percent to $1.1 billion.
The results were pulled down by the strong U.S. dollar, but even allowing for the currency impact, hardware sales declined and software revenue was flat.
The challenge Oracle faces is that businesses are shifting spending to the cloud and away from equipment they install in house. Oracle needs to make sure it captures a large chunk of that cloud spending, and doesn’t lose it to rivals like Amazon and Workday.
“Our customers are not going to leave us,” Chairman Larry Ellison said during Oracle’s earnings call. “On the contrary, they’re going to move a lot of what they have to the Oracle cloud.”
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SOURCE: Computer World
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