Oracle's quarterly earnings have fallen short of guidance but the IT vendor has a strong foundation for growth next year, thanks to its "sales-centric" strategy, according to an industry analyst.
In a statement Wednesday, Elizabeth Henlin, analyst at Technology Business Research (TBR), said Oracle's "sales-centric mentality" of heralding its customer wins and highlighting deployments for both its software and engineered systems portfolios, alongside company president Mark Hurd's "comprehensive campaign" to expand distribution of its engineered systems within direct and indirect channels, will give the company a foundation for strong growth when it kicks off 2012.
The IT vendor encountered a "rare miss" in its fiscal second quarter, ended Nov. 30, as financial results for the period fell short of expectations, said Henlin.
She said Oracle on Tuesday announced its total revenue grew just 2 percent year-on-year, supported by its software maintenance base which climbed 9 percent year-on-year, churning US$4 billion. However, revenue for hardware fell 14 percent to US$953 million, she noted.
Despite the shortfall, the TBR analyst believed Oracle will see a performance rebound in the near-term where growth will be driven by the midmarket segment and Oracle's expansion into the cloud, in which it is still under-represented in a vast number of small and midsize accounts.
Despite Oracle's late entry into the cloud market, she noted that the acquisition of RightNow in October allows the vendor to maintain a "targeted competitive focus" on both SAP and Salesforce.com.
"As Oracle continues to publicly embrace the cloud--late, relative to competitors--RightNow delivers immediate, proven cloud credibility," she said. "Oracle has used the power of its purse to galvanize its cloud presence, establishing a timely position for maximizing install base share of wallet during a near-term that promises ongoing customer concerns about investment scale and scope."
Taking aim at the competition
During the company's quarter conference call to discuss its earnings, Oracle CEO Larry Ellison took aim at competitors including IBM and SAP. According to a report by ZDNet US, Ellison declared Oracle's Exalogic offerings to deliver better performance than IBM's fastest P series systems.
"I know IBM's running a lot of ads saying they run faster; that their machines run faster than ours. But I'd love to see their customer references because we haven't seen one," he said. He then shifted his attention to SAP with claims that Oracle's Exadata database performed better than the German software vendor's Hana systems.
Both Ellison and Hurd used the concall to tout the company's product pipeline and established customer base as selling points.