Oracle database sales slow

Oracle’s latest financial results showed the benefits of the company’s recent acquisitions, but also highlighted the challenges facing its databases sales.

Third-quarter revenue from new licences for business applications grew 77 per cent year on year to $269m (£155m), reflecting the purchase of PeopleSoft completed early in 2004. The acquisition of Siebel this year has already added $22m (£12.7m).

Over the past two years, Oracle has spent some $19bn (£11bn) buying rival firms in an attempt to overtake SAP, the market leader in business software. But in the past 12 months, sales of databases, the vendor’s most established product range, grew just five per cent, prompting a small drop in its share price last week. In the Europe, Middle East and Africa region, sales of database and middleware software fell from $325m (£187.4m) to $316m (£182.2m).

Oracle chief executive Larry Ellison says the company is evolving its offerings to reflect the changing market. ‘Oracle’s product strategy is based on a combination of innovations and acquisitions,’ he said.

Ovum analyst David Mitchell says the effect of Oracle’s purchases is significant. ‘The PeopleSoft acquisition still has a distorting effect on the figures,’ he said.

‘Our analysis indicates a like-for-like growth at a more modest level of three to six per cent in application revenue.’

Further reading:

Q&A: Oracle UK’s Ian Smith

Is Oracle the new Chelsea?