Oracle sees tech gloom lifting

Oracle claims that the worst of the slowdown in technology spending is now over.

Chief financial officer Jeff Henley made the sunny statement when he announced Oracle's Q4 earnings, which had beaten lowered expectations.

Although Oracle's revenue for its fourth quarter dropped to $3.26 billion from $3.37 billion a year ago, the world's second largest software firm cut costs to record a net income of $855 million. For the full financial year Oracle recorded earnings of $2.56 billion on revenue of $10.86 billion.

"We think, we hope that the worst is over. Hopefully we hit the bottom in our fiscal Q4," Henley told Reuters. He predicted Oracle's software license revenue would be flat during its next quarter.

Oracle is seen as a barometer of overall IT spending and the good news in its figures was that the firm weathered what was expected to be an extremely difficult quarter.

However there was cause for concern in the detail of Oracle's results. Sales of applications, which are seen as crucial for the growth of the firm, were down nine per cent to about $840,000. Stronger competition from IBM and user dissatisfaction with Oracle's licensing policy contributed to a slight one per cent decline in the firm's core database business, with sales of $2.4 billion,

Last week Oracle announced its decision to abandon its controversial universal power unit (UPU) model, where licensing fees are based on the power of a processor, to a flat-rate model with the launch of its 9i database software. Oracle9i Standard Edition will carry a list price of $15,000 per CPU and Oracle9i Enterprise Edition $40,000 per CPU.

In a related move Oracle has released a toolkit, called Oracle Migration Kit for ASP (Active Server Pages), which provides firms with a mechanism to migrate databases and applications from Windows to (Java 2 Enterprise Edition) running on Sun servers and Oracle's 9i Application Server.

The product is designed to tempt developers away from the Windows camp and its success will be crucial to Oracle attempts to boost its disappointing application revenues. ®

External Links

Oracle results statement

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