Larry Ellison says no-one "normal" would move to Amazon as Oracle keeps Wall Street happy with Q2 numbers

Stuart Lauchlan Profile picture for user slauchlan December 17, 2018
A better end to calendar 2018 than a year ago as Ellison continues to bait Amazon.

Larry Ellison on stage at oow17
This time last year Oracle closed out calendar 2017 with a bump as Wall Street took against its latest quarterly numbers. It’s a better year-end this time around with results which, while not stellar, didn’t spook investors and in fact sent the share price up.

Revenue was $9.56 billion, down from $9.59 billion last year, but net income rose 5% to $2.33 billion. Cloud services and license support revenue rose to $6.64 billion from $6.46 billion, while cloud license and on-premise license revenue declined to $1.22 billion from $1.33 billion.

There were more encouraging numbers emerging from the SaaS business, with Co-CEO Mark Hurd stating:

Overall, ERP and HCM now have annualized SaaS revenue of $2.6 billion, up mid-20s percent. Fusion apps revenue growth was 34%; Fusion ERP revenue growth was 44% organically; NetSuite ERP revenue growth 25%; vertical revenue and applications grew 35%; annualized revenue now up $800 million.

Fusion now has 6000 customers, topped up by NetSuite’s 16,000. Hurd cited some new logos that had been added during the quarter:

One win was at MGM. This is MGM Resorts, the hospitality company, ERP really our full suite, including supply chain that actually replaced a product called Infineum…We had a very large win at a large distribution company whose name I can't mention, but it was a complete suite win ERP, HCM…Another exciting win we had was at Johnson Controls. Johnson Controls was again a sweet win where we sold them both our service cloud and our field service solutions and really to one of their divisions also ERP in their Tyco division, very exciting win for us. Hormel Food - great win for us. ERP, our full suite of ERP inclusive of HCM very exciting. A company called Securitas…again a full suite win there. Helzberg Diamonds, again a full suite win there as well.

Amazon again

Chief Technology Officer Larry Ellison resumed his sabre-rattling in the direction of Oracle’s current bête noire - Amazon:

In terms of technology, there is no way that a normal person would move from an Oracle database to an Amazon database. It's just incredibly expensive and complicated and you've got to be willing to give up tons of reliability, tons of security, tons of performance to go ahead and do it. But we have a huge technology advantage.

Of course, moving off the Oracle database is precisely what Amazon has said it’s doing and with some urgency. Ellison was dismissive of this effort, implying that the decision would actually work in Oracle’s favor by deterring others from attempting the same:

[Amazon CEO] Jeff Bezos gave the command, ‘I want to get off the Oracle database’. And they've been working on this for a few years to try to get off the Oracle database and get on to the Amazon databases. It's taken Amazon, who is dedicated to doing this, several years and they are not there yet. [That’s] why nobody else is going to go through that forced march to get go on to the Amazon databases if Amazon can't even get there without this effort.

Ellison added that there are now “thousands of Oracle Autonomous Database trials” underway among the customer base. These have thrown up one interesting theme for the CTO:

The thing I thought would drive the Autonomous usage was reduction of labor cost. You eliminate human labor, you lower cost, you eliminate human labor, you lower errors. What has really been driving is productivity. We've had customers that literally got their databases up and running in 15 minutes. And existing customers, existing DBAs, put up another system in 15 minutes, whereas a normal quantum to put something up like that was 15 days.

So the fact that the existing teams at our primary customers can make themselves dramatically more productive, get 10 times more done in the same time period than they could prior to the Autonomous Database, has been the thing that has been most shocking to our customers. And it's the thing that we think is actually going to drive the migration more so than, if you will, closing data centers and reducing labor costs.

My take

Not the most exciting of quarters, but one with some solid progress in key areas and one that did the job it needed to do of putting some confidence back into Wall Street after Q1 disappointed. Both Hurd and Ellison turned to third party validation from analysts, firstly IDC on ERP and secondly Gartner on database tech, to make their cases rather than just making bold claims. That said, Amazon’s status as Public Cloud Enemy Number One was once again given an Ellison-ian airing. Whatever else happens in 2019, that’s not about to change any time soon.

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