Oracle Corp. posted solid earnings growth on Tuesday, bolstered by sales of its database software. The company reported earnings of 19 cents a share, up from 16 cents when compared with the same quarter last year. Total revenue rose 9% to $3.1 billion.
Software revenue grew 12% to $2.5 billion, while services revenue dropped 4% to $558 million, Oracle said. Sales of new database licenses grew 15%, helped by early adoption of its new 10g database management system (DBMS), according to the company.
Sales of Oracle's DBMS had increased more than 10% in the last two quarters, following two years of flat sales. Sales of Real Application Cluster (RAC), a required component of building a grid, skyrocketed over the last year, with sales up 60%.
"Since we introduced Grid technology six months ago, our database business is up 15%," said Oracle CEO Larry Ellison. "It's still early in the adoption cycle, but the Oracle 10g database is off to a fast start. The market is just beginning the move to databases and application servers running on grids of low-cost computers -- and Oracle is leading the way."
Noel Yuhanna, a senior industry analyst with Cambridge, Mass.-based Forrester Research Inc., said Oracle's main challenge with its 10g DBMS is working with its partners to build grid computing standards. Oracle recently established a grid consortium to develop standards across the industry.
"Standards have to be established if Oracle wants to have continued success with its grid message," Yuhanna said. "There has to be a multi-vendor platform, and I think Oracle recognizes that."
The conference call was held yesterday while much more attention was being paid to Oracle's ongoing court battle with the Justice Department, which is attempting to block Oracle's attempts to acquire PeopleSoft Inc.