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Oracle to Roll Out DB Cloud Services and Multitenant DBaaS at OpenWorld


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Just after Oracle announced that Larry Ellison would take on the role of executive chairman and CTO, and be succeeded as CEO by Safra Catz and Mark Hurd, the three Oracle executives hosted the company's fiscal 2015 Q1 earnings call.

Ellison noted that at Oracle OpenWorld, which starts September 27, 2014, the company will be rolling out its new database cloud service with its new multitenant DBaaS offerings. “Our customers and ISVs can move any of their existing applications and databases to the Oracle Cloud with the push of a button,” said Ellison.

“With the push of a button, your data is automatically compressed 10 to one, and encrypted for secure and efficient transfer to the cloud. With the push of a button your existing application automatically becomes a full multitenant application and it’s moved to the Oracle Cloud - no reprogramming is required. Every single Oracle feature, even our latest high speed and memory processing is included in the Oracle Cloud Database service. Hundreds of thousands of customers and ISVs have been waiting for exactly this. Database is our largest software business and database will be our largest cloud service business,” said Ellison.

Hurd shared facts about the Oracle cloud business, and noted that while the transition to the cloud is still in the early stages “we are already at a run rate of nearly $2 billion.” He added that engineered systems now make up one-third of Oracle hardware. “While we’re growing double digits, our competitors are declining double digits. We shipped our 10,000th engineered system in Q1. Lifetime bookings in hardware alone for engineered systems now exceed $3 billion. Hardware support margins are now approaching 70% as a testimony to the change in our overall hardware mix and the stickiness of this business.”

Catz, who reviewed the Q1 results, also stated that she will no longer use the title of CFO and will be the principal financial officer for all regulatory purposes. Oracle will not be hiring a CFO, and Catz’s teams will continue to report to her.

Total revenue for the quarter was $8.6 billion, up 2% from last year, she said. Total software and cloud revenue was up 6% to $6.6 billion. Software-as-a-service (SaaS) and Platform-as-a-service (PaaS) cloud revenue were $339 million, up 31% from last year. Infrastructure-as-a-service (IaaS) cloud revenue was up 25% to $138 million. While engineered systems continue to grow and represented more than one-third of the hardware revenue over the past 12 mongths, Catz said that in total, hardware systems revenue was down 8% to $1.2 billion, as other servers and storage revenue, especially tape, declined.

“Customers have started to move from on-premise systems to the cloud but with so many on-premise customers and only 30% of our support-base I applications, we haven’t seen a reduction in software updates and product support renewal rates, which continue at their usual high levels,” said Catz. “However, as the movement to the cloud grows, we expect this transition will affect our revenue – to the positive. These customers will essentially replace their software support payments with a cloud subscription which will mean substantially more revenues to Oracle. That is because not only will we be providing the most up-to-date software, but we’ll also be providing the hardware, the application management, and complete operation.”

To access the live webcast of this event, go to the Oracle Investor Relations website at www.oracle.com/investor


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