Oracle's second-quarter results are in and you guessed it—the company made a lot of money. What's always more interesting to dig into than the raw numbers is what's said by executives on the conference call. It's there where key bits of color about the results can provide sharper insights into industry trends. Here's a look at the highlights from this quarter's call.
Cloud ERP Gains Momentum for Oracle
Oracle added 311 cloud ERP customers in the quarter, with 1,500 now in the installed base and 450 live, CEO Mark Hurd said during the call. In ERP and EPM sales, "more than half of our Q2 wins did not have Oracle on-premise apps," he added. ERP customer wins included Blue Shield of California, DHL, the FDIC, McKesson and "a very large industrial manufacturing company -- perhaps the largest in the world, with over $130 billion of revenue," Hurd said.
POV: A few caveats here. For one thing, Hurd did not make clear how large or strategic any of the ERP deals were. Still, CTO and executive chairman Larry Ellison termed cloud ERP as Oracle's fastest-growing SaaS suite. And Hurd went as far to predict Oracle would end its fiscal year with more than 2,000 cloud ERP customers.
Winning Against Workday?
Oracle scored 211 cloud HCM sales in the period, which puts it at a faster growth rate than Workday. "In a couple of these we actually replaced Workday," Hurd said. Oracle has an edge in that it can offer a broader set of products: "Because of ERP being in many ways a very strategic, very sticky sale, we now see our attach rates moving up and up and up where somebody buys ERP, and they buy HCM at the same time."
POV: While Oracle may have won against or replaced Workday, what you never hear about on earnings conference calls are the deals a company lost to that same competitor. And as with cloud ERP, Oracle's SaaS HCM growth rate certainly reflects the much larger scale of its global sales operations and installed base to sell into.
Oracle PaaS Sees Growth, But Remains Modest Piece of Cloud Story
The company's PaaS (platform as a service) added more than 1,300 customers in the quarter, with 4,100 over the past 12 months, Hurd said. The company has booked $100 million in revenue for PaaS, with 75 percent of it as subscription. Customer wins for PaaS included Anthem, IKEA, KIA Motors, Maersk, Qantas, Symantec and Windstream.
POV: While Oracle expects the PaaS business to continue scaling up quickly, on balance those numbers suggest many companies are so far taking an experimental approach with Oracle's PaaS, given the number of customers compared to the booked revenue.
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