Oracle hits out at Salesforce as cloud revenue grows

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 reported SaaS and PaaS revenues of $375m for the third quarter 2015, up 33 per cent from the previous year, with the company’s cloud services now growing at a quicker rate than those offered by Salesforce according to Oracle chief technology officer Larry Ellison.

While Oracle reported strong growth in its cloud services segment, the company’s overall revenues, however, remained flat at $9.3bn, with a 2 per cent decline in hardware systems revenue (to $1.3bn) and operating income down 5 per cent to $3.4bn.

Nevertheless, the company’s executives were quite pleased with the results.

“In Q3, we sold nearly $200 million of new SaaS and PaaS business as measured in annual recurring revenue,” said Oracle chief executive officer Mark Hurd.

“In Q4, we expect to sell over $300 million of new SaaS and PaaS annual recurring revenue. That means we have a real chance to sell more SaaS and PaaS new business this coming quarter than any other cloud services provider. I think our hyper-growth in the cloud comes as a big surprise to a lot of people,” Hurd said.

Ellison was less inclined to mince words in a call with press and analysts this week, calling out one of its biggest direct competitors in the CRM space – Salesforce.

“Oracle now has a cloud revenue run rate of well over $2 billion a year. We’re already the world’s second-largest SaaS and PaaS company. On our last quarterly conference call, I predicted that in our fiscal year 2016 Oracle would likely sell more SaaS and PaaS new business than Well, I was way too cautious.”

“I now believe that Oracle will sell more new SaaS and PaaS business than in this current calendar year, 2015,” he said.

This kind of rhetoric isn’t uncommon among the awkward yet symbiotic trio, SAP, Oracle and Salesforce, which to some extent have come to epitomise the dynamic between the large slower moving incumbent and the smaller but rapidly growing new kid on the block.

Last month Salesforce, which is led by ex-Oracle executive Marc Benioff, announced a record fourth quarter with full fiscal year 2015 revenue hitting $5.37bn. In a call with press and analysts to discuss the results Salesforce vice chairman and president Keith Block said it achieved those results “right in SAP’s backyard.”