Oracle expresses sales optimism
Published: 15 Jul 2004 11:40 BST
Oracle touted its growth in the server applications market on Wednesday and pointed to trends that it believes will further bolster its business.
Despite a recent setback in sales in the software sector, Chuck Phillips, co-president, said at Oracle's analysts' conference that he is optimistic about company growth. A number of enterprise software companies, from PeopleSoft to Siebel Systems, have recently issued quarterly warnings saying that sales are slow.
"One of the key things we're doing with our applications server business is doubling the sales force in fiscal 2005", Phillips said. "We have that much confidence in that business... and so do others. We're getting a lot of resumes from people who work for our competitors."
Phillips was among several Oracle executives scheduled to speak at the event, including chief executive Larry Ellison, co-president Safra Catz, and Jeff Henley, outgoing chief financial officer.
Oracle also introduced its new chief financial officer, Harry You. The former Accenture CFO spoke briefly and noted that he plans to focus on shareholders by expanding their return on investment and increasing Oracle's free cash flow.
Phillips cited a number of indicators that point to growth in Oracle's database business, including a rise in the number of customers that are outsourcing their business and an anticipated 10 percent to 15 percent increase in customers of transaction-processing companies.
He also pointed to regulatory changes that require businesses to increase the period that they have for retaining information. Phillips noted that all of these factors mean that people will need to increasingly store and share data, which, in turn, will bolster Oracle's database business.
Oracle's midmarket database software, Oracle Standard Edition One, has captured 15 percent of the company's overall revenue over the past two quarters, Phillips noted.
He reiterated the benefits that Oracle has reaped from its partnership with Dell. Under that deal, the computer giant either preinstalls or offers the database software on a CD with its PowerEdge 2600 and PowerEdge 2650 servers.
On the applications side, Oracle is looking to beef up its business through several initiatives, Phillips said.
The company is focusing on offering more functions for the particular industry that a customer is in, for example.
"Going forward, we'll have more industry functionality," Phillips said.
He added that the company has recently hired the former Navy surgeon general to help develop applications to serve the health care industry, particularly the federal and military health care segments. "We're a lot bigger in the health care industry than people realise," Phillips said.
Oracle will break up its applications server suite and in the next 60 days will begin selling individual components of that product, Phillips said. The move was prompted by customers who were reluctant to purchase the entire suite, because they felt that they needed only one or two components.
"We can try to sell them more (components) later," Phillips said.
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