Oracle rings up the profits

Oracle has reported booming second quarter profits, expressed confidence that its takeover of Sun will get regulatory approval and announced an enhanced Cloud strategy. The company reported second-quarter profits up 12 percent year on year, to £924 million, on turnover up 4 percent to £3.6 billion.

New software license revenues, a key indicator of growth and stability, were up 2 percent to £1 billion.

The company also expects European regulators "to unconditionally clear" its acquisition of Sun Microsystems in January, Oracle President Safra Catz said in a statement. The deal has been on hold while the European Union conducts an antitrust review.

Sun will quickly improve its market share and financial performance once the merger closes, Oracle CEO Larry Ellison said in another statement.

He said Oracle intends to build and sell complete systems for private cloud computing platforms, combining Sun hardware and storage with Oracle's virtualisation and middleware products, he said.

Oracle's performance in the quarter was broad-based and not dependent on large deals, Catz said during a conference call Thursday.

The economy generally seems to be getting better, she added.

"We're definitely seeing customers back buying. It's extremely widespread ... We really are seeing a recovery," she said.

One Oracle product in particular, its emerging Exadata line of data warehousing appliances, will make a major impact in the future, according to co-President Charles Phillips.

"Exadata is on fire," he said. Oracle's stockpile of sales leads is growing week to week, and some customers are asking for multiple systems, Phillips said. "The main problem we have now is production capacity."

Exadata "is going to be huge," generating billions of dollars from system sales alone, not to mention annual maintenance fees, Ellison added. "How long it takes to get there remains to be seen," he said.

High-end products such as Exadata reflect Oracle's overall hardware strategy following the Sun deal's close.

Sun probably will never have the ability to compete in the high-volume, low-margin server business, Ellison said. "Dell and HP are good at it; we're going to avoid it."

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