Asahi Associates - Oracle Sees Drop in Sales.
Asahi Associates - Oracle Corp.’s hardware sales have slumped by 24 percent compared to the same quarter last year.
Wisconsin (I-Newswire) October 15, 2012 - Oracle Corp. has struggled to turn around its Sun Microsystems unit amid an environment of reduced technology spending, resulting in hardware sales plummeting compared to the same quarter last year. A source close to Oracle reportedly hinted to Asahi Associates that they expect the sales slump to continue and even deepen for the near term.
Despite good growth in the volumes of orders for some of its hardware appliances - specifically, database and analytics appliances - overall Oracle hardware sales were again below expectations. To some of the media pundits, Oracle's dependence on technologies like analytics seems to ignore the cloud opportunity, but that's because these people don't understand the difference between cloud commitment and cloud stories.
Billionaire Chief Executive Officer Larry Ellison allegedly reported on Oracle’s fiscal first quarter that hardware sales had fallen. The Silicon Valley company had reportedly predicted that sales could fall. Oracle are believed to be predicting a drop for their second quarter, compared with last year.
Ellison is betting big with Oracle's cloud products. The company is set to unveil major cloud solution announcements at its annual OpenWorld conference in San Francisco.
"We will announce lots of enhancements to the Oracle Cloud. There are more CRM, ERP and HCM applications as a service, and more Oracle database, Java and social network platform services," Ellison said. "Our new infrastructure-as-a-service is available in the Oracle Cloud and as a private cloud in our customers' data center, with the unique ability to move applications and services back and forth between the two."
An independent analyst working closely with Asahi Associates commented that it is a highly competitive marketplace and demand has contracted. He added that Oracle’s rivals, which include Dell, IBM, Cisco Systems and Hewlett-Packard, are gaining market share at Oracle’s expense in the hardware market.
On a brighter note for Oracle, they reported sales of new software has gained from last year, meeting with their own predictions. Oracle have forecast a revenue gain for subscription and new sales revenues for their second quarter.
"We recognised the change was coming and we did the hard thing. There's a lot of inertia in a big company. It takes a lot of management focus to shift from business as usual." said Ellison.
The analyst also hinted to Asahi Associates that while Oracle’s software core was showing healthy performance, their hardware business was definitely not the finished article. Oracle’s hardware unit is focused on growth areas, which should in time provide results.
This year has proven a tumultuous one for Oracle. The company purchased cloud computing personal specialist Taleo for $2bn last February. Oracle also lost a high profile patent infringement case against Google in July.
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Published On:October 15, 2012
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