Hurd bangs R&D drum after strong Oracle Q1

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Hurd bangs R&D drum after strong Oracle Q1

Microscope contributor

Robust demand for hardware and software licenses helped Oracle push up its fiscal Q1 profits and sales close to 20% and 50% respectively.

In the trading period ended 31 August, earnings reached $1.3bn on the back of revenues of $7.5bn.

"We executed better than expected on both the top and bottom line for the quarter," said Oracle CFO Jeff Epstein.

The firm sold $3.4bn worth of software license updates and product support, soaring 46% on a year earlier, as new software licenses climbed 17% to $1.28bn and services sales went up 14% to $1.06bn.

Sales of hardware systems grew 15% to $1.7bn and system support increased 8% to $619m, which had been "faster" than anticipated with Sun Solaris servers and Exadata spearheading the growth, the company said.

The strategy is to push up hardware margins from 48% to 60% and Oracle vowed to drop unprofitable lines in the pursuit of this goal.

High-end systems that combine Sun hardware and Oracle software will be launched at the OpenWorld event next week, said Mark Hurd, former HP CEO who was recently brought on board by Oracle as president. 

The appointment followed his resignation at HP last month after an investigation into allegations of sexual harassment made by a former marketing contractor unearthed a series of falsified expense claims made by Hurd.

The 25-year partnership between the two giants of Silicon Valley is now in danger of hitting the rocks after Oracle reacted angrily to a lawsuit HP slapped on Hurd, claiming that he broke his contractual agreements by joining a rival.

IBM boss Sam Palmisano has also weighed to the tussle with stinging criticism of HP, highlighting that under Hurd HP's R&D budgets shrank, forcing it to shell out on expensive acquisitions.

Hurd almost seemed to exploit this new found support from IBM by claiming "We will invest over $4bn in research and development this year, so our already robust product portfolio is only going to get stronger."

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