Oracle's tools giveaway pays off

Reports higher margins, fewer heads

Oracle's net income growth ran ahead of revenue growth in the first quarter, the company reported today.

Revenues were up 14 per cent to $2.26 billion in the quarter of the corresponding quarter last year, but slightly lower costs and higher margins saw net income more than double over the same period last year to top $500 million.

Tools revenue was down 38 per cent as Oracle has gradually made many of its tools freely available, or at available at very low cost. "Our tools business is in decline," said CEO Larry Ellison, "but our software business is in the ascendency, with 31 per cent growth or 28 per cent adjusted for currency." He claimed that the number of registered developers had grown by 28 per cent in the last three months.

Oracle recently launched its 11i Applications suite, which had yet to make a significant impact on earnings, said the company. Database growth was steady, with Ellison claiming the Oracle was "losing no deals to Microsoft and very few to IBM".

The company announced a two-for-one stock split for 12 October. ®

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