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Oracle News | March 25, 2019

Oracle Leaps to Pole Position in Cloud Business Applications Race

By: Michael Hickins | Sr. Director of Strategic Communications

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Oracle has grabbed the highest market share in North America for enterprise applications, according to market research firm IDC. Meanwhile, Oracle’s vaunted Autonomous Database, which automates software patching, tuning, and many other operations without the need for human intervention, is “the most successful introduction of a new product in Oracle’s 40-year history,” Chairman and CTO Larry Ellison said on the company’s Q3 earnings call.

Customers seem to be responding positively to Oracle’s cloud application suite strategy, as well as the promise of improved security and productivity thanks to the Autonomous Database.

The company, which Thursday reported strong growth in its core business applications business, is seeing some of its biggest cloud bets paying off. Oracle reported Q3 revenue of $9.6 billion. Its total cloud services and license support revenue was $6.7 billion, representing 69 percent of revenue.

Oracle CEO Mark Hurd said revenue for the company’s Fusion human capital managemententerprise resource planningsupply chain, and manufacturing cloud applications in aggregate grew 32 percent in Q3 compared with the year-ago quarter, and revenue for its NetSuite ERP cloud applications grew 30 percent. Oracle’s total net income increased to $2.7 billion.

“Per IDC’s latest annual market share results, Oracle is the number one enterprise applications vendor in North America based on market share and revenue, surpassing Salesforce.com and SAP,” Hurd said on the earnings call.

(This is based on the IDC Semiannual Software Tracker, October 2018. Market share and revenue for 2H2017- 1H2018. North America is the USA and Canada. Enterprise Applications refer to the IDC markets CRM, Enterprise Resource Management—including HCM, Financials, Procurement, Order Management, PPM, EAM—SCM, and Production Applications.)

Hurd also noted that ERP helps drive sales in other parts of the business. “When we sell ERP we continue to see an attach rate to HCM and frankly an attach rate to even some of our other apps,” including Oracle’s cloud-based sales, marketing, customer service, and other front-office applications, Hurd said.

As Ellison noted, customers don’t want the onus of integrating applications in the cloud, which makes Oracle’s suite of applications a winning strategy in the long run.

“Customers do not like to be responsible for the complex process of integrating lots of different applications, running on lots of different vendors’ clouds,” he said.

On the Oracle Cloud Infrastructure side of the business, the benefits of Autonomous Database are so obvious—immediate software patching and the ability to redirect labor to more value-added activities—that Oracle is able to sell that database directly into the C-suite and to business users, and not just to IT organizations, the executives said.

The company says it has nearly 1,000 paying Autonomous Database customers by the end of Q3 and about 4,000 new trials in Q3.

Oracle’s profitability mix also continues to improve, as higher-margin businesses such as apps continue to grow while lower-margin businesses such as computer hardware decline, Oracle CEO Safra Catz said.

 

 

Sr. Director of Strategic Communications

Michael Hickins is a senior director of strategic communications at Oracle. He is the former editor of The Wall Street Journal's CIO Journal.

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