As demand for cloud-based services continues to soar, Oracle (News - Alert) Corp. reported fiscal second-quarter sales and profit that exceeded analysts’ estimates for Internet-based software, which is now on track to bring in more than $1 billion in revenue this year.
The Redwood City, Calif.-based company has unveiled that fiscal 2013 Q2 total revenues were up three percent to $9.11 billion. That compares with analysts’ average projection for profit of 61 cents on sales of $9.02 billion, according to data compiled by Bloomberg (News - Alert).
Oracle’s second quarter performance reported double-digit revenue growth in new software license and cloud subscriptions, with expectations that the company’s cloud growth will become “much bigger” in time, according to Oracle President Mark Hurd (News - Alert).
“Applications, middleware and database all had double-digit growth in new software license and cloud subscriptions, with applications leading the pack with growth of over 30 percent,” Hurd said in a statement. “Our cloud offering of HCM, CRM and ERP applications plus the Oracle database and Java platform services is the strongest and most complete in the industry. Already approaching a one billion dollar run rate, our cloud business will become much bigger over time.”
In addition, new software licenses and cloud software subscriptions revenues were up 17 percent to $2.4 billion and software license updates and product support revenues were up seven percent to $4.3 billion.
Fending off smaller rivals such as Salesforce.com Inc. and Workday Inc., which also offer Web-based business products, Oracle’s acquisitions of RightNow Technologies (News - Alert) Inc. and Taleo Corp. earlier this year have no doubt bolstered the company’s revenues from its cloud business.
The acquisitions indicate the increasing enterprise acceptance of the Software-as-a-Service (Saas) model, with HCM following in the footsteps of Customer Relationship Management (CRM) “as the next SaaS (News - Alert) battleground,” according to Chief Analyst Tim Jennings.
Net income for the quarter, which ended Nov. 30, rose 18 percent to $2.58 billion, or 53 cents a share, from $2.19 billion, or 43 cents, a year earlier, Bloomberg reported. Since 2005, Oracle has spent more than $50 billion on more than 80 deals, fueling an expansion in sales and earnings, the report said.