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Oracle full-year results: 1% revenue decline as Covid-19 bites

Oracle sees 1% decline in full year-on-year 2019-20 revenue, and a 6% drop in its fourth quarter, but takes comfort from OCI Zoom win in pandemic crisis

Oracle has announced a 1% decline in full year-on-year revenue, and a 6% drop in its fourth quarter, compared with the equivalent quarter last year.

The supplier’s full-year revenue was $39.1bn, and Q4 revenue was $10.4bn. In its earnings statement, it drew attention to “cloud services and licence support” revenues being up 1% year on year to $6.8bn, and up 3% in “constant currency”. Licence revenues for on-premise and cloud combined stood at $2bn.

In the statement, Oracle founder and chief technology officer Larry Ellison emphasised the Oracle Autonomous Database that has been the company’s flagship over the past few years. “In Q4, we launched a vastly improved version of our Exadata Cloud@Customer service,” he said. “This now enables our existing on-premise database customers to run the Oracle Autonomous Database in their own datacentre. Previously, the Oracle Autonomous Database was only available in Oracle’s Gen2 Public Cloud.  

“Enabling all our on-premise database customers to upgrade and run Oracle’s latest and best database technology in their own datacentre should dramatically accelerate the rate of adoption of the Oracle Autonomous Database…especially by our largest customers, including banks and governments that are not currently planning to move their largest and most critical systems to a public cloud.”

Oracle CEO Safra Catz said: “Our Fusion Cloud ERP suite grew 35% and our Fusion Cloud HCM suite grew 29%. Our overall business did remarkably well considering the pandemic, but our results would have been even better except for customers in the hardest-hit industries that we serve, such as hospitality, retail and transportation postponing some of their purchases.”

Although fellow business applications and database supplier SAP also reported numbers impacted by the Covid-19 pandemic, it still posted numbers showing revenue growth for the first quarter of its fiscal year.

In the call for financial analysts, transcribed and published by the SeekingAlpha financial news service, Catz added: “We entered Q4 with an enormous pipeline of transactional business. As the quarter progressed, we saw a drop-off in deals, especially in the industries most affected by the pandemic. As countries begin reopening their economies, many of these discussions have already resumed.

“Since these were not losses to competitors, we believe that most of this business will ultimately be booked. And while some customers have deferred projects, we are also rapidly building new pipeline with customers that are moving their on-premise workloads to the cloud.”

Ellison, putting the emphasis on what he sees as Oracle’s competitive advantage in database technology, said: “Autonomous self-driving computer systems eliminate human labour and eliminate human error. There is nothing for humans to learn and nothing for humans to do. Eliminating human labour dramatically lowers the cost of running an autonomous system. Eliminating human error dramatically increases data security and system reliability.

“All of the big data losses at Amazon were caused by human error. There is no opportunity for any human error if your data is stored in an Oracle autonomous system. This is a very big deal.”

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Ellison also trumpeted the deal that Oracle struck with Zoom in the quarter: “Oracle’s Gen2 autonomous, serverless, elastic cloud infrastructure delivers better performance, higher security at a much lower cost than AWS, Azure or the Google Cloud. And that’s why we won Zoom,” he said.

“Demand for Zoom’s services has increased almost 20 times since January. Zoom needed additional cloud capacity immediately. Within hours of the first Oracle deployment, OCI supported hundreds of thousands of simultaneous meeting participants. Usage has continued to ramp, where Oracle now supports millions of simultaneous meeting participants.

“Zoom selected OCI because of our advantages in price, performance, scalability, reliability and cloud security. Every day, our Zoom conferences move more than 8PB through the OCI network. That’s an extraordinary amount of data.”

On the applications front, Ellison underscored what he sees as an edge on SAP: “Oracle is the cloud ERP market and technology leader with over 7,100 Fusion ERP customers and nearly 22,000 cloud ERP NetSuite customers. We have taken a huge lead in the cloud ERP market because our largest competitor, SAP, never rewrote their ERP applications for the cloud.

“Gartner lists Fusion, Oracle Fusion at the very top of their ERP ranking, with SAP in the lower half, listed with the lower half of competitors. This is a dramatic change from a few years ago. Workday has a cloud ERP system, but most of their successes come in HCM. And more and more customers these days are purchasing HCM as a part of an overall ERP purchase, an ERP decision.”

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