Oracle claims winning hand in SAP war

Oracle posted better than expected results for the financial quarter ending 31 May. Revenues rose 26 per cent to $3.88bn and net income increased by three per cent to $1.02bn.

All segments of the business contributed to the revenue increase, Oracle said, with databases, enterprise applications and middleware showing the best results.

Total software revenues were up 25 per cent to $3.12bn. Database and middleware sales were up 16 per cent and application revenues increased by 52 per cent.

Oracle claimed good results from its integration of PeopleSoft and JD Edwards with the database vendor. In a conference call, Oracle co-president and chief financial officer Safra Catz said that retention rates were "in the high 90 per cent ratio".

A high customer turnover would render the PeopleSoft acquisition more costly, making Oracle's ability to retain users a key metric in the success of the deal.

German software maker SAP, Oracle's main competitor in the enterprise application market, has been preying on the PeopleSoft and JD Edwards users with its Safe Passage programme that promises rebates for companies switching to SAP.

On the same day that Oracle published its financial results, SAP further built out its defector programme, which now also targets small and medium businesses. The programme aims to capitalise on the uncertainty with customers over Oracle's future course.

Oracle claimed in the conference call to have increased its market share lead over SAP in North America and named a number of customer wins including Cisco, Bank of Scotland and American Express.

These firms were either former SAP users, or new customers which chose Oracle over its German rival.

Oracle chief executive Larry Ellison trumpeted the company's strong position in segments including banking and telecoms where it is "much stronger than SAP" .

He also claimed that Oracle applications are inherently more secure. "We have security features that SAP cannot implement because that they do not have a full software stack."