Software giant Oracle recorded its strongest first-quarter results for several years, driven primarily by a 78 per cent year-on-year growth in applications revenue.

Sales rose 30 per cent to $3.6bn (£1.9bn), and net profit was up 29 per cent to $670m (£353m).

Software revenues, a figure important to Wall Street, increased 29 per cent to $2.7bn (£1.4bn) and services revenue was up 33 per cent to $846m (£445.8m).

Ovum analyst David Mitchell says the performance of Oracle’s applications business was the most significant contributor, rising to $228m (£120m).

Year-on-year growth for technology licence revenue was strong at 13 per cent, with middleware sales growing more strongly than database revenue.

‘The business application market has always been competitive, but the past year has seen the intensity increase,’ said Mitchell. ‘Oracle competed effectively in the applications market and intensified competition can only be a good thing for the customer.’

Mitchell says the 49 per cent growth of Oracle’s On Demand business unit was not trumpeted by the firm because of its integration with Siebel On Demand.

‘SAP appears to be rethinking its strategy as it loses application market share to Oracle,’ said chief executive Larry Ellison. ‘They have just announced that they are delaying the next version of SAP applications until 2010.

‘That is a full two years behind Oracle’s scheduled delivery of our Fusion applications.’

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