Oracle makes suspect claim during earnings call

Oracle has reported revenues of $9 billion during its latest quarterly earnings call, but its assessment of the global SaaS market was wide of the mark.

Cloud SaaS and PaaS revenues were $878 million, up 81%, with the IaaS business collecting $175 million representing a less-than-enthralling growth of 6%. The company’s shift into cloud computing has been slow, after Executive Chairman Larry Ellison dismissed the importance of the technology in the early days, but there does seem to be some progress as cloud revenues now account for roughly 11% of this quarter’s revenues, compared to just over 7% during the same period of 2015.

“For four consecutive quarters our Cloud SaaS & PaaS revenue growth rate has increased,” said Oracle CEO, Safra Catz. “As we get bigger in the cloud, we grow faster in the cloud. Our non-GAAP constant currency SaaS and PaaS growth rate is now up to 89%. This growth rate acceleration has driven our quarterly cloud revenue over the $1 billion mark. When Salesforce.com crossed the billion-dollar milestone their SaaS and PaaS subscription growth rate had slowed down to 36%, even after you include all their acquisitions.”

“Oracle has now passed Salesforce.com and become number one in SaaS cloud applications sales to customers with over 1,000 employees according to the latest IDC report,” said Oracle CEO, Mark Hurd on the subsequent earnings call. “In other words, this year we are selling more enterprise SaaS than any cloud services provider in the world.”

After reading the second statement we got a little bit suspicious. Oracle has been growing healthily, but to mark itself as the most successful SaaS company in the world seems to be a bit of a stretch.

After consulting IDC over the claim, we confirmed Oracle can maintain it is the number one company when it comes to selling SaaS to companies with more than 1,000 employees, but the second part of the statement is incorrect. Oracle is in fact ranked number four when looking at total SaaS sales, with 5.2% of market share. Salesforce is still number one.

Whether this is intentionally misleading depends on whether you are an optimist or pessimist. Optimists will maintain it was a simple mistake and ‘Enterprise SaaS’ was a reference to the size of the company, whereas pessimists will highlight that enterprise is very common term in the technology world, used to differentiate between consumer and commercial sales (irrelevant of the size of an organization) and Hurd was being intentionally misleading.

What is worth noting is that Ellison didn’t make the same mistake on the call: “We will book more than $2 billion in annual cloud sales this year, much more than Salesforce.com. We are catching after them and we’re catching them very quickly.” Ellison has a history of making brash statements, but he’s toed the line with this one.

In other news, the brown-nosing of President-elect Donald Trump by the technology industry has continued. Trump held his first meeting with leaders of the technology world this week, with broad smiles all round despite most attendees offering very little support during the election campaign. Oracle has managed to cosy up to the White House in a very effective manner, as Safra Catz will join the executive committee of U.S. President-elect Donald Trump’s transition team, according to Reuters.

Catz will remain at the helm of Oracle at the same time, though it is likely Hurd will be asked to shoulder some additional responsibilities with Catz’s new commitments. In light of this, maybe someone should buy good ole Mark a dictionary for Christmas to avoid any future bloopers.