Oracle sales grew only 2% to $8.8bn (£5.6bn) for its second quarter results compared to the same period last year, sparking fears that companies are cutting back on tech spending.
Experts had anticipated sales of 7%. Hardware revenue for the quarter took the largest hit, down by 14%.
“Given the economic backdrop a miss on expectations would not have been so surprising but it was the size of the difference between expectations and reality that was notable. Reading between the lines it looks like even the Oracle execs were surprised by this,” said Angela Eager, analyst at TechMarketView.
“We have expanded our worldwide sales capacity by adding over 1,700 sales professionals in the first half of this fiscal year,” said Oracle president, Mark Hurd. “We believe that this increase in our field organization combined with innovative new products like Fusion Cloud ERP and Cloud CRM will enable solid organic growth in the second half of this year.”
New software licence revenue was up 2% to $2bn against Oracle’s own expectations of 6% to 16%, while maintenance revenue was up 9% to $4bn.
“The overall results suggest that Oracle will be paying a lot more attention to the cloud and that it will make the RightNow acquisition work hard once it completes because of its potential to add volume to sales. As to the wider picture, Oracle is probably the early warning sign that spending is slowing but it is too early to estimate by how much,” added Eager.