Oracle posts higher profits despite flagging server sales

ENTERPRISE VENDOR Oracle reported an 11 percent increase in profits to $2bn as its hardware sales plummeted by 24 percent.

Oracle, which gained Sun Microsystem's server business when it bought the firm, has managed to increase profits for its fiscal 2013 first quarter despite a drop in revenues. The firm revealed a two percent drop in revenues to $8.1bn, while profits rose by 11 percent to $2bn.

Oracle's hardware business reported a steep decline in revenue as the firm reported a 24 percent drop in revenue generated by its hardware systems products to $779m. The company also reported an 11 percent decline in hardware support revenue to $574m.

Oracle CEO Larry Ellison said the firm will announce new products at next week's Oracle Openworld conference, including new servers and a new version of Oracle's flagship relational database software.

Ellison said, "A little more than a week from now we will announce lots of enhancements to the Oracle Cloud. There are more CRM, ERP and HCM applications as a service, and more Oracle database, Java and social network platform services. Our new infrastructure as a service is available in the Oracle Cloud and as a private cloud in our customers' data center, with the unique ability to move applications and services back and forth between the two."

Oracle's flagging hardware business didn't hit the firm's bottom line because of impressive cuts in operating expenses. However Ellison and his board members know that Oracle cannot keep cutting expenses to hide the underlying problems with its Sparc server business. µ