Oracle Aiming for the Clouds, Reports 2Q17 Revenue of $9B

Friday Dec 16th 2016 by Sean Michael Kerner
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Once again, cloud is the key area of growth for Oracle, though engineered server systems are also doing well.

Oracle reported its second quarter fiscal 2017 financial earnings on December 15, showing strong cloud growth as the company positions itself as a competitor to Amazon Web Services.

For the quarter, Oracle reported revenue of $9.0 billion, which represents flat year-over-year growth. Net Oracleincome was reported at $2 billion, for an 8 percent decline from the second quarter of fiscal 2016.

One area of continued decline for Oracle in recent years has been its hardware server business, and the second quarter of 2017 was no exception.

Oracle reported total hardware revenue for the quarter at $1 billion, for a 10 percent year-over-year decline. While hardware overall is down, CEO Mark Hurd noted that Oracle's Engineered Systems group, which includes the Exadata and Exalogic server systems, continues to be a bright spot.

"Engineered systems grew in both bookings and revenue in the quarter, and that ecosystem continues to be very successful and very profitable for us," Hurd said on Oracle's earnings call with financial analysts.

Hurd added that Oracle had declines in its traditional server business and those declines offset the growth in engineered systems.

"So it's really the tale of two product lines, engineered systems growing and the traditional server product lines declining," Hurd said.

Cloud Continues to Be The Company's Big Story

The big story for Oracle in 2016 overall has been its pivot to the cloud, which has yielded strong results. Oracle's Cloud, SaaS, and PaaS revenues for the quarter were $912 million, up 89 percent year-over-year.

Oracle CTO and Chairman Larry Ellison commented that historically he measured his company's performance by comparing its technology and market share to its two primary competitors, SAP for applications and IBM for infrastructure and database. That changes as Oracle moves to the cloud.

"In the cloud, we measure Oracle against salesforce.com for applications and Amazon Web Services for infrastructure and database," Ellison said. "We are making a multiyear generational shift to the cloud and we’re well on our way to being number one in both cloud application and cloud database, and we are doing it with very little or no compromise to our earnings or our cash flow."

Sean Michael Kerner is a senior editor at ServerWatch and InternetNews.com. Follow him on Twitter @TechJournalist

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