Profit booms at Oracle

Oracle kicked off its new fiscal year with its biggest increase in software sales since the dot-com boom, propelling a first-quarter performance that topped analysts' expectations.

The Redwood City company said Thursday that it earned $840 million, or 16 cents a share, for the three months ended Aug. 31. That represented a 25 percent improvement from net income of $670 million, or 13 cents a share, at the same time last year.

If not for stock-option expenses, Oracle said, it would have earned 22 cents a share - a penny above the average estimate among analysts polled by Thomson Financial.

Revenue for the period totaled $4.53 billion, 26 percent above last year's $3.59 billion and easily surpassing the average analyst estimate of a $4.34 billion. If not for a weak dollar that bolstered international sales, Oracle said its first-quarter revenue would have been up 22 percent.

Perhaps most important to investors, Oracle's sales of new software licenses climbed 35 percent to $1.09 billion, soaring past both management and analyst projections. Analysts had been anticipating an improvement in the mid-20 percent range.

The spike in Oracle's first-quarter software sales was the largest since free-spending Internet start-ups were driving demand in 2000, said Safra Catz, the company's chief financial officer.

The first-quarter gains included about $87 million in sales from two recently acquired companies, Hyperion and Agile Software, whose products weren't sold by Oracle last year.

Wall Street focuses on software sales because the new licenses establish a pipeline for future revenue from product upgrades and maintenance.

Oracle shares reached a new 52-week high of $21.31 Thursday before falling back to finish the regular session at $21.04. The stock added 6 cents in extended trading after the company released its first-quarter report.

"It was a strong quarter across the board," said Piper Jaffray analyst Ajaykumar Kasargod. "The (sales) execution is really coming along."

Catz predicted Oracle's momentum will continue in the current quarter. She forecast the company's software sales will rise by 15 percent to 25 percent in the three months ending in November to produce earnings of 26 or 27 cents a share, excluding stock-option expenses.

The first quarter is usually Oracle's weakest sales period because so many key decision-makers take summer vacations.

"If things weren't going well, this is where you would see it," Catz told analysts during a Thursday conference call.

August looked like it might be even more challenging this year as a worsening credit crunch triggered by the slumping real estate market roiled the stock market and raised concerns about both consumers and businesses curtailing their spending.

But the worries apparently didn't stop companies, schools and government agencies from buying Oracle's software.

The first-quarter performance extended a prosperous stretch that has justified an expensive expansion launched in 2004.

Hoping to build upon the company's dominance in database software, Oracle has spent about $25 billion on more than 30 acquisitions in the past three years. The shopping spree has primarily been aimed at luring customers away from Germany-based SAP, the leading seller of business-applications software that helps companies manage their operations.

During the first quarter, Oracle's sales of applications software rose 65 percent to $376 million.

Oracle also is making significant inroads in middleware software - coding that helps the applications work more effectively with the database software. The company's sales of database and middleware software increased 23 percent during the first quarter to $711 million.

"I would say that in the last 12 months, Oracle has certainly established itself as a much more viable software provider," said AMR Research analyst Bruce Richardson.

Author: Michael Liedtke

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Microsoft offers Oracle defectors up to 50 percent off SQL Server

SQL Server 2008 isn’t set to be released to manufacturing until the second quarter of next year. But Microsoft already is taking aim at Oracle with its forthcoming release.

Microsoft officials announced on September 19 that they have no plans to increase the price of SQL Server 2008 beyond what the company already charges for SQL Server 2005. Microsoft execs also announced that, starting today, customers who migrate from Oracle to SQL Server will get a 50 percent discount on the price of SQL Server Enterprise Edition or 25 percent off the price of Standard Edition. However, both discounts are available only when users sign up for Software Assurance, Microsoft’s annuity volume-licensing plan.

Microsoft made its SQL Server announcements at the Professional Association for SQL Server (PASS) Community Summit in Denver. More specifics on the Oracle pricing promotion will be provided on Microsoft’s SQL Server Migration page.

This past spring, Microsoft held a contest to entice developers to build Oracle-Office mash-ups. Microsoft also created earlier this year a new user consortium designed to work with joint Oracle-Microsoft customers.

In other database-related news, Microsoft also announced on September 19 that its Office PerformancePoint Server 2007 product will be released to manufacturing this week. PerformancePoint is Microsoft’s latest business-scorecarding application and a key component of its business-intelligence line-up. PerformancePoint provides users with monitoring, analysis and forecasting/budgeting functionality. PerformancePoint builds on top of SQL Server and uses Office as its user interface. PerformancePoint integrates with SQL Server Reporting Services, SharePoint Services and SharePoint Server, officials said. It costs $20,000 per server, plus $195 per Client Access License (CAL), and $30,000 per Internet connector.

Microsoft officials said more than 10,000 customers kicked PerformancePoint 2007’s tires as part of the Community Technology Preview (CTP) test process.

Officials declined to discuss how Microsoft plans to add a services component to PerformancePoint in the future. But earlier this year, Microsoft officials said that Microsoft is developing a managed business-intelligence bundle that will include Microsoft-hosted versions of SQL Server and PerformancePoint. Still no date so far on when Microsoft plans to make that hosted BI offering available, however.

Author: Mary Jo Foley

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Oracle links business process analysis, SOA

Oracle is announcing Wednesday an enhanced version of its business process analysis software that enhances collaboration between process modelers and implementers.

Oracle Business Process Analysis Suite 10.1.3.3 features "closed loop support" for business analyst and IT collaboration, sharing a common process model format with the Oracle SOA Suite, Oracle said.

The new business process analysis suite features round-trip engineering, said Amlan Debnath, vice president of server technologies at Oracle. "What it lets you do is share the [business process] model with IT," Debnath said.

A developer, for example could make a change to a business process that would be shared with the business persons.

Modeling of processes is done in the business process analysis package and then executed in the SOA Suite, which features an SOA execution engine that leverages BPEL (Business Process Execution Language). Business users can build and change business models in the business process suite while IT persons can view and modify these processes in the SOA package.

Integration between Oracle Business Process Analysis Suite and Oracle SOA Suite includes linking of business process analysis, execution, and monitoring tools.

Oracle's business process suite is the company's version of the IDS Scheer Aris product, said analyst Bruce Silver, principal at BPMS Watch. Oracle addresses the round-tripping problem in which business persons model a process and hand it off to IT, which then implements its own idea of what it believes the process should be, Silver said.

Oracle has created an intermediate format based on shared metadata between the modeling tool and the implementation tool, which is the SOA suite, Silver said.

"You solve this round-tripping problem now because the model is not just initial requirements for the implementation, but it's a continuous business view of the business process throughout the business process [implementation] lifecycle," said Silver.

Oracle Business Process Suite is a component of the Oracle Fusion Middleware Platform. The suite starts in price at $5,000 for five users.

Author: Paul Krill

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