Oracle's Q1 app sales plunge by one-third
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Oracle's revenues grew a modest 7% in its fiscal first quarter as sales of new application software licences plunged by one-third.
15 September 20 Oracle's revenues grew a modest 7% to $2.22 billion in its fiscal first-quarter of 2005, while net income grew 16% to $509 million. However, most of the database and application giant's revenue increase was due to upgrades and product support, rather than new licence sales.
The world's second largest software company did, however, boast of strong sales of its flagship 10g database software for grid computing, growing by 18% compared with year-ago growth. "Since we introduced our database for grid computing, Oracle 10g, our database new licence sales have grown 16%, 15% and 19% respectively over the last three quarters," said CEO Larry Ellison.
But Oracle's quarterly sales in the business applications market, which comprises applications used to manage business functions such as financial reporting and human resources, plummeted 36% over the last quarter. The company's new applications software licence sales dropped to $69 million from $107 a year ago.
Harry You, Oracle's chief financial officer, claimed that Oracle's poor performance in the business applications market was a "one-quarter aberration" and that the antitrust hearing into its hostile takeover bid for rival PeopleSoft did not have any bearing on results. But he added that Oracle had been hit with $29 million in acquisition-related costs.
However, PeopleSoft CEO Craig Conway suggested otherwise in a press release following its quarterly results in July: "Our financial results in the second quarter reflected the heavy media coverage of the United States of America versus Oracle trial," PeopleSoft's quarterly net income declined to $51 million from $54 million a year ago during this period.
Meanwhile, German software giant SAP, the market leader in business applications sector, has increased its lead over Oracle and PeopleSoft in the applications market.
