Archivo de la categoría: quarterly results

Enterprise IT, Financial Results, HPE, News & Analysis, quarterly results

Whitman thanks partnerships for strong HPE Q1

HPE street logoHewlett Packard Enterprise (HPE) has claimed earnings of $300 million in its first quarter of 2016 show it is shaping up for the cloud more strongly than expected.

HPE CEO Meg Whitman claimed that the success of the company was a consequence of a strong product offering. “Our portfolio is truly the best we’ve had in years and is driving strong customer traction,” said Whitman, who claimed the company was in better shape for the cloud, describing it as ‘agile and nimble’. In January BCN reported how HPE is faced with making 72,000 more redundancies this year, according to IT market watcher Trip Chowdhry at Delaware-based Global Equities Research.

The results created earnings of 41 cents per share in HPE, exceeding the expectations of Wall Street analysts, who reportedly expected non-GAAP earnings of 40 cents a share. While Wall Street had estimated HPE’s revenue to be $12.68 billion, the unexpectedly good revenue figure was marginally higher, at $12.7 billion.

According to HPE, the earnings for the next quarter could be as high as 43 cents a share.

Whitman told analysts that HPE is in a much better position, being the main infrastructure provider for SAP HANA with double the number of shipments of its nearest competitor. Another important deal, with Canadian comms company Rogers, helped HPE establish its credential as a leader in creating hybrid cloud infrastructures for enterprises as the move away from their existing traditional IT systems. In January BCN reported how hybrid cloud management is the main focus of HPE’s cloud strategy.

Meanwhile, HPE’s networking revenue showed 62% growth on the same period last year. This was attributed to the acquisition of wireless networking specialist Aruba Networks in March 2015, which has created record revenue from China revenue performed well in other regions. “We are seeing strength in China,” said Whitman. Aruba also grew double digits at an operational level and the vendor enjoyed demand for HPE’s switching portfolio to complement Aruba’s wireless offerings.

Enterprise group revenue was up 1% on the equivalent period in 2015, at $7.1 billion. Networking revenue grew by 54%, through Aruba’s wireless tech sales, however server and storage sales declined, falling by 1% and 3%. More worryingly perhaps, enterprise service revenue is also in decline, falling by 6% to $4.7 billion, while software revenue dropped by 10%.

News & Analysis, quarterly results, Salesforce

Salesforce quarterly figures prove cloud industry resistant to IT downturn

Salesforce’s latest quarterly figures have reversed the conventional logic of valuing cloud company stock, according to stock markets reaction.

Before the cloud giant’s latest figures were released, many Wall Street analysts were looking for signs of a downturn in the cloud industry, according to Reuters, which reported that the cloud software leaders is regarded as a barometer for conditions across the cloud industry. After a poor sales outlook from Tableau earlier this month, many analysts were looking for proof of a downturn in the cloud industry. Conventional wisdom in the money markets was that poor cloud performance would follow a downturn in the IT industry, related to worries about the economy.

However, when Salesforce returned higher better than expected revenue reports in its quarterly review and raised its yearly revenue forecast, analysts began to speculate that cloud sales and IT investment may be inversely related. At the end of the first day’s trading after Salesforce’s figures were released its stock has risen 7.2%, reported Reuters.

The cloud giant company upped its revenue forecast for the year from $8.0 billon-$8.1 billion to $8.08 billion-$8.12 billion. Analysts on average were expecting a profit of 99 cents per share on revenue of $8.08 billion.

Salesforce’s Chief Financial Officer Mark Hawkins dismissed the pessimistic outlook the money markets have for the cloud industry in the current uncertain economy. “We aren’t seeing an economic impact,” said Hawkins.

The opposite of analysts’ expectations is taking place, he argued, since the cloud computing sector thrives when businesses make more careful buying decision and choose cheaper, simpler to install services that can be costed more flexibly. Another point of departure between cloud and IT company stocks is that they are bought by different people. Salesforce is often installed over the head of the IT department, Hawkins said.

In January BCN reported how BT has effectively become a reseller channel for Salesforce, giving its corporate customers the option of a hotline to Salesforce’s cloud service through its BT Cloud Connect service.

News & Analysis, Oracle, PaaS, Platform as a service, Quarterlies, quarterly results, Saas, Software as a service

Software and platforms as a service driving our growth says Oracle

OracleOracle’s latest quarterly results show the increasing strategic of importance of revenue from cloud software and platforms as a service, according to the vendor. Chairman Larry Ellison also claimed the sales figures show Oracle will soon overtake Salesforce as the top selling cloud operator.

The official figures for Oracle’s fiscal 2016 Q1 period show that total revenues were $8.4 billion, which represent a two per cent fall in US dollars but a seven per cent rise in constant currency. Oracle attributed the fall to the current strength of the US dollar.

However, a clearer pattern emerged in the nature of software sales, when benchmarking all sales in US dollars. While revenues for on premise software were down two per cent (in US dollars) at $6.5 billion, the total cloud revenues were up by 29 per cent at $611 million. The revenue from Cloud software as a service (SaaS) and platform as a service (PaaS) was $451 million, which represents a 34 per cent increase in sales. Cloud infrastructure as a service (IaaS) revenues, at $160 million, rose 16 per cent in the same period.

Meanwhile, Oracle’s total hardware revenue figure for the period, $1.1 billion, also indicated a decline, of three per cent. Using the same US dollar benchmark, Oracle’s services revenues for the period more or less stagnated, at $862 million, a rise of one per cent.

Growth is being driven by SaaS and PaaS, according to Oracle CEO Safra Catz. “Cloud subscription contracts almost tripled in the quarter,” said Catz, “as our cloud business scales-up, we plan to double our SaaS and PaaS cloud margins over the next two years. Rapidly growing cloud revenue combined with a doubling of cloud margins will have a huge impact on growth going forward.”

Oracle’s cloud revenue growth rate is being driven by a year-over-year bookings rise of over 150 per cent in Q1, reported Oracle’s other joint CEO Mark Hurd. “Our increasing revenue growth rate is in sharp contrast to our primary cloud competitor’s revenue growth rates, which are on their way down.”

Oracle is still on target to book up to $2.0 billion of new SaaS and PaaS business this fiscal year, claimed executive chairman Larry Ellison. “That means Oracle would sell between 50 per cent more and double the amount of new cloud business that Salesforce plans to sell in their current fiscal year. Oracle is the world’s second largest SaaS and PaaS company, but we are rapidly closing in on number one.”

Ginni Rometty, IBM, Kevin Turner, Luka Mucic, Microsoft, News & Analysis, quarterly results, SAP, Vendor

IBM, Microsoft struggle while SAP largely bucks the trend

IBM, Microsoft and SAP all released their financial results this week

IBM, Microsoft and SAP all released their financial results this week

IBM and Microsoft revealed steep losses this week as the two companies released their Q2 financial results, but SAP seems to have bucked the trend with close to 130 per cent growth in cloud revenues and 13 per cent growth in revenue.

IBM revealed second quarter net income from continuing operations was $3.5bn compared with $4.3bn in the second quarter of 2014, a decrease of 17 per cent, and revenue was down 13 per cent, much of which it blamed on recent large divestitures and related cash impairments.

Year on year growth in its cloud business – from $2.8bn in the second quarter last year to $4.5bn in Q2 2015 – and ten per cent growth in its analytics business hasn’t fully compensated for some of the challenges the company facing elsewhere in its business. The company’s revenues have been in decline for almost three years sequentially.

“Our results for the first half of 2015 demonstrate that we continue to transform our business to higher value and return value to shareholders,” said Ginni Rometty, IBM chairman, president and chief executive officer. “We expanded margins, continued to innovate across our portfolio and delivered strong growth in our strategic imperatives of cloud, analytics and engagement, which are becoming a significant part of our business.”

Microsoft saw quarterly revenues hit $22.2bn in Q2 this year, but the company reported record losses of $14.7bn, much of which resulted from the impact of its $7.5bn write-down of its failing Nokia business, with other costs related to the restructuring nearing $1bn. The company also said the strengthening of the dollar relative to other currencies had a significant impact on its results.

But Microsoft reported commercial cloud revenues grew of 88 per cent in the quarter, driven largely by Office 365, Azure and Dynamics CRM Online uptake, while the division selling on-premise licenses for its productivity offerings declined 4 per cent; the company said it added roughly 3 million cloud users in the quarter.

“In our commercial business we continue to transform the product mix to annuity cloud solutions and now have 75,000 partners transacting in our cloud,” said Kevin Turner, chief operating officer at Microsoft.

German software giant SAP seems to be one of the few large incumbents bucking the trend this quarter. The company revealed cloud subscriptions and support revenue grew 129 per cent in Q2, new cloud bookings were up 162 per cent, and it more than doubled its SAP HANA customers year on year (from 3,600 to over 7,200). The company reported overall quarterly revenues rose 13 per cent to €1.39bn.

“Our second quarter growth in new cloud bookings was significantly higher than in the first quarter. This momentum showed across our entire cloud and business network portfolio,” said SAP chief financial officer Luka Mucic. “Our operating profit performance is beginning to reflect the business transformation we initiated to make SAP ready for the future. We are on track to achieve our full year business outlook.”

The results come as all three companies – Microsoft, IBM and SAP – continue ambitious redeployment and reorganisation efforts to address a shift in the market towards cloud services and away from legacy software and services.

Financial Results, Larry Ellison, News & Analysis, Oracle, Quarterlies, quarterly results, Safra Catz, Salesforce

Oracle Q4 cloud revenues grow 29%, down 5% overall

Larry Ellison said the company's cloud revenue will eclipse Salesforce's revenue this year

Larry Ellison said the company’s cloud revenue will eclipse Salesforce’s revenue this year

Oracle Corporation has announced its 2015 fiscal Q4 quarterly earnings, unveiling impressive growth for its PaaS and SaaS business, which is up 29% on last year. The company posted overall revenue of $10.7 billion however, down 5% year on year.

After a bullish announcement of its Q3 results in March, where Oracle boss Larry Ellison publicly called out rival Salesforce, the software giant posted Software and Cloud business revenues at $8.4bn, down 6% year on year, while its SaaS and PaaS revenues came in at $416m.

Announcing the decline in revenues, Oracle was hasty to point the finger at the fluctuating strength of the US dollar against international exchange rates; it claimed total revenues would have been up 3%, software and cloud revenues up 2% and SaaS and PaaS growth 35% instead of 29% year on year, blaming the strengthening of the U.S. dollar.

Oracle CEO Safra Catz is expecting the growth of its SaaS and PaaS revenues to kick up a notch in fiscal year 2016.

“We sold an astonishing $426 million of new SaaS and PaaS annually recurring cloud subscription revenue in Q4,” he said. “We expect our rapidly increasing cloud sales to quickly translate into significantly more revenue and profits for Oracle Corporation.” For example, SaaS and PaaS revenues grew at a 34% constant currency rate in our just completed Q4, but we expect that revenue growth rate to jump to around 60% in constant currency this new fiscal year.”

In highlighting his firm’s ambition for the coming fiscal year, Ellison again took the chance to name-check one of Oracle’s main competitors.

“We expect to book between $1.5 and $2.0 billion of new SaaS and PaaS business this fiscal year,” he said. “That means Oracle would sell more new SaaS and PaaS business than salesforce.com plans to sell in their current fiscal year – the only remaining question is how much more. Oracle’s planned SaaS and PaaS revenue growth is around 60% in constant currency; salesforce.com has a planned growth rate of around 20%. When you contrast those growth rates it becomes clear that Oracle is on its way to becoming the world’s largest enterprise cloud company.”

IBM, Martin Schroeter, News & Analysis, quarterly results

IBM reports flat revenues but cloud revenue is up 75%

IBM reported strong performance in cloud despite nearly three years of sequential quarterly declines

IBM reported strong performance in cloud despite nearly three years of sequential quarterly declines

For Q1 2015 IBM reported flat revenues year on year and operating income slightly up on last year, due in part to currency impacts and some of the recent restructuring efforts at the firm, respectively. But the company also reported strong performance in its ‘as-a-service’ segment.

The company reported strong growth in its Power and mainframe businesses, with quarterly mainframe revenue more than doubling (with particularly strong growth in China). The company said Power showed strong performance in the scale-out systems market as well, in part due to the expansion of Power architecture in SoftLayer datacentres.

But at $19.6bn in the first quarter of 2015 revenue at dropped for the 12th consecutive quarter at IBM if a stronger dollar and the impact of divested businesses are taken into consideration.

The company’s chief financial officer Martin Schroeter aimed to reassure the market that bold moves to invest in new areas like Internet of Things and restructure its business were having a positive impact.

IBM is spending billions to shift its focus on lower-margin strategic initiatives like cloud, big data, mobile, security and IoT, and is continuing to “rebalance” its workforce at the same time.

“As we continue the transformation of our business, I’d expect a similar level of workforce rebalancing next quarter, which will impact our year-to-year profit performance,” Schroeter said.

“At our investor briefing at the end of February, we spent a lot of time on how we are transforming our business to where we see long-term value in enterprise IT. We have a core portfolio that’s high value to our clients and high value to us. Quite frankly, it’s essential.”

“While the market for these capabilities isn’t necessarily growing, we continue to reinvent and innovate to deliver that value,” he added.

But performance in areas of strategic importance for IBM looks promising. Schroeter said the annual “as-a-service” run rate stands at $3.8bn, up $1.5bn in the last year. Cloud revenue was up over 75 per cent from last year; on a trailing 12-month basis, the company reported cloud revenue of $7.7bn, with analytics up more than 20 per cent and social more than 40 per cent.