Oracle's net income for the fourth quarter ended May 31 rose 36 percent to US$3.2 billion over the same period last year, results that reflect growth in software sales but a slight dip in hardware revenue, the company reported Thursday. Total revenue for the quarter grew 13 percent to $10.8 billion.
New software license sales, which are considered a key indicator of growth and customers' attitude toward IT spending, rose 19 percent to $3.7 billion.
Hardware systems products revenue fell 6 percent to $1.2 billion.
For the full year, net income jumped 39 percent to $8.5 billion on $35.6 billion in revenue, a rise of 33 percent.
The new software license growth in the fourth quarter occurred "with almost no help from acquisitions," Oracle President and CFO Safra Catz said in a statement.
The vendor moved into hardware with the acquisition of Sun Microsystems. It has rolled out systems such as the Exadata data-processing machine, which combine hardware and specialized software.
Those systems "made a strong contribution to our growth in Q4," Oracle President Mark Hurd said in a statement. "Today there are more than 1,000 Exadata machines installed worldwide. Our goal is to triple that number in FY12."
"Oracle's doing a good job of pushing hardware in its installed base of customers," said analyst Ray Wang, CEO of Constellation Research, in an interview Thursday before the results were announced. "It's leading with Exadata and slowly learning how to sell and service as a hardware company, not an easy skill for a company that's traditionally not been in hardware."
Wang, who helps software buyers negotiate contracts with vendors, has seen "the usual flurry of end-of-year discounting" in fourth-quarter deals with Oracle, "but not as steep as in years past."
"Oracle's definitely gaining on the apps side of the business, but as with other companies, the growth is coming from the edge apps, not the core ERP apps per se," he added.
After a long wait, Oracle is finally poised to release its next-generation Fusion Applications, which are supposed to combine the best attributes of its various acquired software lines.
Oracle customers are thinking about Fusion Applications in different ways depending on their particular situation, Wang said. Die-hard "Red Stack" customers that are already heavily invested in Oracle technologies are mostly moving to E-Business Suite 12 and then to Fusion Applications, while customers who find their vendors acquired by Oracle "tend to be in a wait-and-see mode," he said.
"I can also say there are some old time Oracle customers from the 1990's also contemplating a look at SAP," Wang added.
Oracle executives are expected to discuss the results further during a conference call Thursday.
Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com
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