Oracle claims winning hand in SAP war

Oracle posted better than expected results for the financial quarter ending
31 May. Revenues rose 26 per cent to $3.88bn (£2.16bn) and net income increased
by three per cent to $1.02bn.

All segments of the business contributed to the revenue increase, Oracle
said, with databases, enterprise applications and
middleware showing the best results.

Total software revenues were up 25% to $3.12bn. Database and middleware sales
were up 16 per cent and application revenues increased by 52%.

Oracle claimed good results from its integration of
PeopleSoft and JD Edwards
 with the database vendor. In a conference call,
Oracle co-president and chief financial officer Safra Catz said that retention
rates were ‘in the high 90% ratio’.

A high customer turnover would render the PeopleSoft acquisition more costly,
making Oracle’s ability to retain users a key metric in the success of the deal.

German software maker SAP, Oracle’s main competitor in the enterprise
application market, has been preying on the PeopleSoft and JD Edwards users with
its Safe Passage programme that promises rebates for
companies switching to SAP.

On the same day that Oracle published its financial results, SAP further
built out its defector programme, which now also targets small and medium
businesses. The programme aims to capitalise on the uncertainty with customers
over Oracle’s future course.

Oracle claimed in the conference call to have increased its market share lead
over SAP in North America and named a number of customer wins including Cisco,
Bank of Scotland and American Express.

These firms were either former SAP users, or new customers which chose Oracle
over its German rival.

Oracle chief executive Larry Ellison trumpeted the company’s strong position
in segments including banking and telecoms where it is ‘much stronger than SAP’.

He also claimed that Oracle applications are inherently more secure. ‘We have
security features that SAP cannot implement because that they do not have a full
software stack.’

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