Oracle CTO Ellison slams Salesforce in cloud financial results discussion

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After 27 years at the top, it remains a slight culture shock to note Larry Ellison as Oracle’s chief technical officer. But despite this he’s still stealing the headlines, by telling analysts in an earnings call his belief that Oracle will sell more new SaaS and PaaS business than Salesforce in 2015.

As reported by Seeking Alpha, Ellison told analysts in prepared remarks: “On our last quarterly conference call, I predicted that in our fiscal year 2016 Oracle would likely sell more SaaS and PaaS new business than Salesforce.com. I was way too cautious and conservative – our cloud business is growing a lot faster than even I expected.

Ellison added: “I now believe that Oracle will sell more new SaaS and PaaS business than Salesforce.com in this current calendar year, 2015. It’s going to be close, but I think we’re going to sell more in the cloud than they do this year.

“I suspect that might come as a big surprise to a lot of people out there,” he noted. “You won’t have to wait very long to find out who’s going to win this.”

It’s big talk, as you’d expect. But do the financial figures back this up?

Well, it depends how you see it. Total SaaS and PaaS revenues went up 30% to $372m, while IaaS revenues went up 28% to $155m. Significantly though, this still only represents 6% of all revenues. Software and cloud represents more than three quarters of all money coming in, but the vast majority of that is tied up in software license updates and product support (50%) and new software licenses (21%). Total revenues, of $9.3bn stayed flat overall, but were up 6% in constant currency.

Oracle seems fairly happy with the results. Safra Catz, co-CEO, said the company was “very, very pleased” with the results, while co-CEO Mark Hurd described it as a “very solid quarter...and a great cloud quarter for Oracle.” The tech giant added nearly 800 brand new SaaS customers in the quarter, while more than 500 existing customers expanded their cloud services.

But how does this compare with Salesforce, who announced another billion dollar quarter and $5bn in annual revenue back in February? Tim Beyers, of the Motley Fool, noted at the time the disparity between balance growth and deferred revenue, which “could suggest the company is having a tougher time signing the sorts of lucrative, multi-year deals [CEO Marc] Benioff wants.”

Ellison said it would be close. Watch this space to see how close Oracle gets.

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