With the recession taking its toll, Oracle moves into the cloud?

Posted Jun 24th 2009 8:00AM by Tom Taulli
Filed under: Earnings Reports, Oracle Corp (ORCL)

Even the mighty Oracle (NASDAQ: ORCL) can't seem to withstand the global recession, as IT budgets continue to tighten. At the same time, the strong U.S. dollar has taken a toll.

In fact, Oracle's fiscal fourth quarter saw the first decline in revenues since 2002. That is, revenues fell 5.2% to $6.86 billion. Profits also decreased 7.2% to $1.89 billion.

Another problem: license revenues. These fell by about 13% for the quarter. Again, this is an indication that it's tough to get new business.

Despite the issues, Oracle continues to find ways to expand its reach. For example, the company is purchasing Sun Microsystems, which will add important server technologies, the Java ecosystem and open source products like MySQL. No doubt, Oracle will also find ways to gut the cost structure, which should help boost overall profits.

Interestingly enough, Oracle's chief, Larry Ellison, also indicated that he's warming up to cloud-computing applications (not long ago he considered these technologies to be essentially worthless). In fact, it looks like the Fusion line will have web-based offerings and there may even be a subscription model.

Let's face it, Larry realizes he needs to go where customers want to go. And that's definitely OK for him, who always seems to find ways to make money – regardless of the environment.

Tom Taulli is the author of various books, including The Complete M&A Handbook and the founder of BizEquity, a free online business valuation tool for small businesses.

Tags: inthenews, JAVA, Larry Ellison, LarryEllison, orcl