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Over the course of two years, software giant ORACLE has spent in excess of $18 billion acquiring rival application makers, above all, to ensure it is not left in the wake of market leader SAP as it powers past the $10 billion mark in annual revenues. And, at first glance, Oracle’s latest figures might suggest that it was money well spent.

Revenues for the three quarters ending 28 February rose 18% to $3.47 billion and net income was up a stunning 42% to $765 million, delivering a chunky 22% net margin.

But behind those headline numbers, there were concerns that the company’s underlying growth (excluding acquisitions) was slowing. Its database software business (including middleware) performed relatively poorly in the quarter, with revenues climbing only 5% to $827 million. The database business brings in 75% of all Oracle’s revenues, but the intensity of competition in the market is picking up. Traditional rivals IBM and Microsoft (which has been attacking Oracle with a new, improved version of its SQL Server product) have been joined by credible open source alternatives, including MySQL and Oracle’s old rival, the Ingres database.

In the company’s Europe, Middle-East and Africa (EMEA) region, the showing in database sales was particularly poor. For the second quarter running, database licence sales fell, dropping 3% quarter-on-quarter to $316 million. In contrast, sales of new database licences in the Americas region rose 16% to $334 million.

The applications software business looked considerably stronger – at least on the surface. Overall it increased in size by 77% to $269 million, quarter-on-quarter, boosted by the addition of revenue from acquired companies (principally Siebel, Retek and i-Flex).

But growth through big-style acquisitions is now on hold, says Safra Catz, Oracle’s chief financial officer, who indicates that there are no significant deals in the pipeline. However, this does not preclude the acquisition of smaller companies, particularly open source vendors, where Oracle has been keen to extend its influence.

CONSULTING HIGHS AND LOWS

While Oracle mulled over further acquisitions, another giant of the IT industry reporting in March had other things on its mind – notably, healthcare. The world’s largest management and technology consulting firm, ACCENTURE, has had a revival in recent years. But that run of good news came to an abrupt halt with the announcement of its second quarter results.

After news broke that one of its key contracts – the vast deal to update IT capabilities of the UK’s National Health Service – had run into trouble, the company was forced to release its numbers two days ahead of schedule. Accenture said it was taking a $450 million provision over three to four years for losses it expects from software implementation delays with the NHS deal. As a result, its net income for the quarter ending 28 February was down 67% – ending a four-year streak of successively higher quarterly net profits. That downturn was accompanied by a modest increase in revenue, up 6.5% to $4.49 billion.

Although the company has blamed subcontractor iSoft for failing to deliver critical software on time, the government’s NHS IT body, Connecting for Health (CfH), has called for “key personnel changes” at Accenture.

Nevertheless, Accenture remains upbeat on its future forecasts, describing the NHS as an ‘isolated’ incident. COO Steve Rohleder says total new bookings in the second quarter were $4.33 billion, with outsourcing and consulting accounting for $1.79 billion and $2.54 billion, respectively. It has also recruited relentlessly: its employee count is up 17% over last year to 129,000.

Accenture’s main European rival, CAPGEMINI, reported similar revenue growth, but was considerably more pleased with itself. In the six months to 31 December, the French company showed a return to profit after three years in the red. Benefiting from the upswing in outsourcing demand, revenue rose 6% to €3.42 billion ($4.18bn) while a rebalancing of its cost base to include more offshore and nearshore delivery enabled helped it to post net income of €83 ($99.6m), compared to a loss of €399 million ($478.8m) in the same period a year ago.

Income for the full 2005 fiscal year was €141 million ($169.2m), up from a loss in the previous year of €534 million ($640.8m). In particular, outsourcing deals signed last year with UK’s HM Revenue and Customs, US utility company TXU and French electrical infrastructure group Schneider Electric have positively impacted revenues, giving the outsourcing unit an overall growth rate of 33% for the full year.

Outperforming both Accenture and Capgemini in terms of growth, Anglo-Dutch services ompany LOGICACMG turned in a revenue rise of 11%, to bank £1.83 billion ($1.67bn) for the year. But it performed inconsistently across Europe, growing 5% in the UK and 11% in the Netherlands during the year, but suffering elsewhere. In Germany, its participation in all its main target markets shrunk (with the exception of financial services), resulting in a 14% downturn in revenues. In France growth was modest too, but the addition of IT services provider Unilog in January will broaden LogicaCMG’s presence, making it France’s fourth largest services business.