Oracle claims 'hyper-growth' in cloud following on-target Q4 results

Cloud is shooting ahead, says Ellison, as company bats away "improper accounting" accusations

Oracle today posted its results for the fourth quarter of 2016, claiming that "hyper growth" in sales of cloud computing services contributed to revenues of $10.6bn.

The company claimed that software-as-a-service (SaaS) and platform-as-a-service (PaaS) revenues grew to $690m - an increase of 68 per cent on the same period a year earlier. Total cloud revenues weighed in at $859m, up by 51 per cent.

For the full year, Oracle posted total revenues of $37bn, down three per cent, but claimed total cloud revenues of $2.9bn, which the company claims is an increase of 36 per cent.

However, the most intriguing highlight of the results was the continuing decline in new licence sales, which were down again, by 12 per cent - in the final quarter - from $3.14bn to $2.77bn.

For the full year, new licence sales fell by 15 per cent, from $8.54bn to $7.28bn.

Nevertheless, despite the decline in the company's core software business, joint CEO Safra Catz was encouraged by the results. "Fourth quarter SaaS and PaaS revenue growth accelerated to six [per cent] in constant currency, significantly higher than my guidance," said Catz.

"SaaS and PaaS gross margins continued to improve throughout the year," she said, adding: "Bookings in the fourth quarter were also very strong, enabling us to raise our guidance for first quarter SaaS and PaaS revenue growth, which we now expect to be between 75 [per cent] and 80 [per cent]."

Oracle's other CEO, Mark Hurd, reckons that the company has picked up 1,600 new SaaS customers and 2,000 new PaaS customers in the fourth quarter, with "Fusion ERP alone" picking up 800 new cloud customers.

Oracle founder Larry Ellison, who once described the entire concept of cloud as "idiocy", said that he expects the "hyper-growth" of SaaS and PaaS Oracle has experienced in 2016 to "continue on for the next few years".

He added: "That gives us a fighting chance to be the first cloud company to reach $10bn in SaaS and PaaS revenue."

However, Oracle experienced a dip in share prices of 5.5 per cent this quarter after it failed to pick up the $9bn it was angling for from Google over the legal clash about Android APIs.

It also had to tackle a very public whistleblowing earlier this month by a former Oracle finance manager, who claimed in court papers that she'd been made to employ "improper accounting" to falsely boost the cloud growth figures that it has pointed to in recent quarters as new software licence sales fall.

A similar accusation of book-cooking in 1990 saw Oracle almost go bankrupt, just after the company's flotation on the stock exchange.