11 November 2002 The IT downturn is the deepest in the industry’s history, but will finally come to an end in 2003, according to Oracle chief financial officer Jeff Henley, speaking today at the OracleWorld conference in San Francisco, California.
“There are certainly parallels with the 1973-1975 period, but the bubble has been bigger this time and that has made the correction bigger as well,” he said.
Henley said he believed the worst was over, but admitted he had could cite little real evidence for such bullishness, beyond a gut feeling. “There is no question that this is a leap of faith,” said the industry veteran. “I don’t have any particular numbers, only the benefit of my own business experience. I just think that two years is a long time [for a downturn to last].”
His comments contrasted somewhat with the views of his boss, CEO Larry Ellison, who said recently that he believed the IT industry had matured and would never again enjoy sustained strong growth.
Many of the biggest IT suppliers have been able to weather the worst ravages of the downturn as many CIOs turn their backs on niche vendors and start-ups in favour of dealing with the strongest companies – ones they feel are better able to make it through the downturn.
But Oracle has been a notable exception to this trend. Net income in its first quarter to August 2002 tumbled by one third from the year-ago period as sales of its flagship database software worsened in Europe and Japan.
However, Henley and Ellison are hoping that the recent release of its fourth major set of products – a personal productivity package called ‘Collaboration Suite’ – will generate fresh growth in 2003, when Henley expects the IT industry as a whole to bounce back.
Oracle has made collaboration a key theme of its user event this week. It says the new application suite can substantially reduce the cost and complexity of running email, voicemail, fax, calendar and web browsing, particularly when compared to rival products from software giant Microsoft.
There are presently about 50 companies testing the new suite, and the company expects the first ‘live’ customers from the beginning of 2003.