Larry Ellison and Oracle aren’t interested when it comes to following the technology trends. They do their own thing, whether it’s mocking the cloud companies or hiring deposed chief executives of dreaded rivals. Somehow, it all works out for the company. Oracle reported blowout results for first quarter of 2011 on Friday, showing 47 percent year-over-year growth in revenues and 33 percent increase in non-GAAP, per-share earnings. Oracle’s sales for the quarter were $8.6 billion and (non-GAAP) profits are at $2.6 billion.
Furthermore, Ellison and Company have shown they can take a money-losing proposition like Sun Microsystems, turn it around and focus it toward making money-generating projects. Sun brought in $1.8 billion (in revenues) this quarter, with gross margins for Sun hardware up to 53 percent. Perhaps there was something to the “Sun being mismanaged” talk after all.
The real story of Oracle’s amazing revenue bump is the one we’ve been writing about for a long time: big data. As companies, big and small, struggle with the explosion of data, it is increasing demand for business analytics and data warehousing products. It’s the main reason why IBM snapped up Netezza and EMC bought Greenplum.
Both those acquisitions have had no impact on Oracle, which is benefitting big by bundling data warehousing and database software with Sun’s hardware, especially its top-end mega-servers. Oracle has three core products focused on the big data market: Exadata, Exalogic and Sun SPARC Superclusters.
Exadata is a combination of hardware and software focused on large data sets and is being widely adopted by old line (and cash rich) companies in the oil and gas exploration area.
The company currently has $2 billion in the pipeline for Exadata alone vs. $1.5 billion a quarter ago. “I think you are going to see a significant jump in Exadata sale going from Q2 to Q3, 2011,” Ellison said. “Think of 60 percent of what we’re doing right now is data warehouse.”
“Our goal is to become number one in the high-end server business for both Online Transaction Processing and Data Warehousing, both of those segments,” Ellison boasted on the conference call with Wall Street analysts. He acknowledged that IBM has good hardware and software, but was dismissive of HP. “HP’s big servers are slow, expensive and have little or no software value add, “ he said. “That makes HP extremely vulnerable to market share losses in the coming year.”
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