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Accenture and Oracle benefit from digital shift

Quarterly results from Accenture and Oracle both show evidence of a customer base that is shifting towards digital and cloud technologies

Digital transformation is delivering for Accenture and Oracle with the consultancy giant reporting that half of its revenues are now coming from 'new' technology areas and the vendor boasting of dramatic increases in its cloud business.

The firm is often dropped into conversations as an example of one of the global players operating at the top end of the market. If there are any lessons that the rest of the channel can learn from the firm's third quarter numbers it is around the shift it is making towards growth areas.

Accenture describes digital, cloud and security-related services as "the New" and reported that those areas now deliver half of its revenues, described by a milestone by the firm, and made strong double digit growth in Q3.

The firm also saw its new bookings up with $9.8m revenues and the consulting and outsourcing sides of the business also had a decent Q3 with $5.2bn and $4.2bn respectively.

“We are pleased with our strong third-quarter financial results. We delivered 7% revenue growth in local currency and gained significant market share, with broad-based growth across most dimensions of our business," said Accenture chairman and CEO Pierre Nanterme.

“We are clearly benefiting from the diversity of our business – from an industry, geographic and capability standpoint – which drives durability in our financial performance. At the same time, our focused investments in high-growth areas, such as digital, cloud and security services, are further differentiating Accenture and enabling us to grow ahead of the market," he added.

Overall Accenture saw net revenues improve by 5% to $8.9bn for the three months ended 31 May. Sales in Europe were up by 9%. Net income for the quarter was $705m, compared with $950m for the third quarter last year.

Another firm delivering quarterly results which gave evidence of a changing landscape was Oracle, which saw its SaaS sales increase  by 75% to hit $1bn in its Q4.

"We sold $855 million of new annually recurring cloud revenue (ARR) in Q4, putting us over our $2bn ARR bookings goal for fiscal year 2017," said Oracle CEO, Mark Hurd. "We also delivered over $1bn in quarterly SaaS revenue for the first time. Next year is going to be even better. We expect to sell a lot more than $2bn in new cloud ARR in fiscal year 2018."

The firm is predicting more of its large customers will move to the cloud and as a result its next fiscal year will see dramatic growth in the PaaS and IaaS cloud businesses.

Oracle has declared full year 2016-17 revenue of $37.7bn, up 2% on the previous year. Cloud revenue was $4.6bn, up 60% on the year before and representing 12% of the total.

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