Oracle surprised analysts and announced impressive earnings and growth across the board for their 2007 Q1 period ending August 31st. In terms of Oracle’s middleware vision and product direction, the strong results that Oracle reported this week make sense. At least for the last couple of years I’ve been impressed with Oracle’s commitment to standards and solid work they’ve done on their Java-based middleware. Their best-in-class JDeveloper IDE and their contributions to the MyFaces JSF project are good examples. Oracle’s work with SOA and Web Services, JSR-168, XML DB, and Content DB are other examples. After being burdened with $20 Billion in debt from acquisitions over the last three years though, I think that few people expected Oracle to execute so effectively during 2007 Q1 given the challenges of their on-going multi-app Fusion project to stitch together PeopleSoft, JD Edwards and Seibel Systems. Long-term, Oracle’s future is still very dependent on the success of Fusion. Oracle’s updates about the project haven’t always been consistent, and people have questioned the chances of its success. If Oracle can deliver on Fusion, they will be a very strong competitor.At this week’s conference call, Oracle CFO Sandra Katz said “Oracle had another very strong quarter with outstanding performance across all product lines and geographies. We raised guidance heading into Q1 following a blowout Q4 and still exceeded on every metric. This is our strongest Q1 license growth in more than five years and there is no doubt that we are gaining market share across all product lines.” This is impressive because Q1 sales for Oracle are typically weak compared to Q4. The integration costs of the their Fusion project were expected to drain Oracle for some time into the future. Part of the reason for these good results may be that customers concerned during the period of Oracle’s turbulent acquisitions may have held back their purchases and have now decided they can wait no longer.Strong growth by Oracle in the Applications business was particularly impressive — year-on-year growth of 78%. During the announcement Oracle made frequent comparisons to SAP and comments of increased market share.Bill Wohl, vice president of product and solutions public relations at SAP shot back that “Larry Ellison’s statements in today’s Oracle earnings press release about SAP’s product and acquisition strategy are a complete misrepresentation”.Another interesting fact that came out of the Oracle announcement is that they’ve experienced 49% year-on-year growth in their On Demand business unit. This may be from their integration of the Seibel On Demand, but it is another data point on the growth potential of the SaaS model.In a separate announcement this week, Oracle’s Content DB and Records Management components have now become available on most of Oracle’s supported platforms.Update: Today Russ Stalters had an interesting analysis of Oracle’s Content DB pricing, questioning whether the pricing really fits their slogan of “ECM for the Masses”.Formtek is an Oracle partner.
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