Oracle bemoans Brexit impact

Oracle has become the second large vendor in a week, following in the footsteps of HPE, to reveal it took a hit from the Brexit decision

The Brexit vote continues to be an issue impacting the large US vendors with Oracle bemoaning the role the vote to leave the EU has played on currency levels and its results.

The software player is the second large vendor to refer in a quarterly results update to the Brexit decision in just a week, with HPE revealing that it had caused a slowdown in public sector business in the UK.

Oracle's CEO Safra Catz told analysts in a conference call that Brexit had caused some headwinds and the decision had come largely as a surprise.

"This quarter, the effects of currency movements were more than expected mostly because of the surprise Brexit vote happened after our earnings call, resulting in a 1% to 3% headwind in most revenue categories, including 1% to total revenue and EPS, which was a $0.01 lower as a result," she said.

"Currency is something I can’t project. And I think after the Brexit vote, I’m pretty sure nobody else has projected it correctly either," she added.

The firm will get the chance to talk to partners at OpenWorld about its ongoing plans to establish itself as a major cloud player but the Q1 results have already given some indication of the progress so far this fiscal year.

Cloud, SaaS and PaaS revenues came in at $816m, which was up by 82% compared to last year, which was helped a lot by the acquisitions of Opower and Textura. New license revenue declined by 11% to $1.03bn but support revenues improved by 2%.

From the looks of things OpenWorld will be dominated by the launch of theb next generation IaaS products as the vendor takes the fight to AWS.

"These new data centers give us the significant cost and performance advantage over Amazon Web Services. Plus, our new bare metal offering makes it possible for our customers to lift and shift their entire existing corporate infrastructure, data and applications without any changes whatsoever and move it to the Oracle Public Cloud. You just can’t do that with Amazon Web Services," said chairman and CTO Larry Ellison.

Oracle's share price dropped slightly on the news of the results because the revenues of $8.6bn and net profits of $1.8bn were slightly short of expectations.

One of the key strengths for Oracle and a plu for its partners is the large customer base and the position that the firm already enjoys in key vertical markets.

"Various cloud solutions launched thus far in 2016 have catered to financial services, healthcare, communication service providers, retail and hospitality segments, within which Oracle already has very strong legacy portfolios and can differentiate in the cloud market by drawing on specializations," said Meaghan McGrath, analyst at Technology Business Research.

"Oracle’s industry expertise will remain valuable on-premises, but also has the opportunity to support differentiation of cloud applications in a crowded market," she added.

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They can’t bemoan too much - their Q1 2016-2017 cloud sales grew to nearly $1bn, with 2% year on year growth.
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