Business Tech

Oracle reported Thursday a 6 percent rise in fiscal second-quarter revenue over last year, fueled by growth in software sales and its support and maintenance business.

Net income for the quarter, however, declined 1 percent to $1.3 billion, or 25 cents a share, for the period ending November 30, compared with the previous year. Excluding special items, Oracle posted non-GAAP net income of $1.7 billion, or 34 cents a share. That was below Oracle's September forecast of 35 cents to 36 cents a share.

Oracle was up less than 1 percent in after-hours trading to $16.70 a share. Investors may have seen some encouragement in its growth in software sales.

The company, which had previously issued a forecast of a 2 percent to 12 percent rise in new software sales, posted an 8 percent increase to $4.5 billion in the quarter.

Another growth area running counter to the downturn in the economy included its steady-as-she-goes support and maintenance revenue, which rose 14 percent to $2.9 billion.

But new software license revenue, a metric that investors tend to keep a close eye on as a means to gauge future growth for the company, fell 3 percent to $1.6 billion. Oracle's services revenue also fell, slipping 2 percent to $1.1 billion.

Update at 11:01 a.m. PST, with historical information on the alliance.

Salesforce.com and Google announced on Monday an expanded alliance, aiming to offer a set of developer tools and service around cloud computing applications.

Force.com for Google App Engine is designed to enable developers to create applications in the cloud. Here's how it aims to work:

Force.com for Google App Engine is a Python library and test harness that lets you access the Force.com Web services API from within Google App Engine applications. Once it is installed in your Google App Engine application, that application can start to (seamlessly) make callouts to the Force.com Web services API. This API lets you query and manipulate data in your Force.com environment - effectively letting you tap into the Force.com platform from within the application.

Marc Benioff, Salesforce.com CEO, noted in a statement that Salesforce and Google are on the same page when it comes to cloud computing and an open environment.

"We have an open vision for cloud computing," Benioff said. "Developers now can take advantage of the easy to use and rapidly scalable cloud computing infrastructure from Google and Salesforce.com to build and deliver powerful business applications."

This arrangement is the latest expansion of a deal Salesforce and Google struck in April, which called for linking Salesforce's customer relationship management software with Google Apps.

And in June, the companies expanded that initial deal with Salesforce creating the Force.com Toolkit for Google Data APIs, allowing developers to connect to data in Google Apps via the Force.com development platform.

Longtime Oracle executive John Wookey joined SAP on Monday as executive vice president of Large Enterprise On Demand, in a move that will pit him directly against his former employer.

Former Oracle executive John Wookey has joined SAP.

(Credit: Stephen Shankland/CNET News)

Wookey, who served as Oracle's senior vice president of applications development for 12 years, left the enterprise software applications maker 13 months ago. Prior to his departure, he was responsible for Oracle's , which seeks to take the best features of its acquisitions and meld them together to create new offerings.

Under his new role, Wookey will work with several large SAP enterprise on-demand offerings, such as SAP CRM on-demand, and develop additional applications relating to that work.

"Wookey's vision, expertise, and impressive track record will not only help us take SAP to new heights, but will also further underscore our position as the world's leading enterprise software company," the company said in a statement.

And while most companies have non-compete clauses, as part of their severance package to executives, an SAP spokesman said that will not be a problem with Wookey.

Oracle declined to comment on Wookey's new role at SAP.

SAP reported its third-quarter results Tuesday, posting a 5 percent decline in earnings and nixing its revenue forecast for the year, given the uncertainty of the economic climate.

The German enterprise software maker, which reported its results prior to the market opening, saw its shares head slightly south as the morning progressed, falling to $30.02 a share, down less than 1 percent in intraday trading.

The company reported revenues of 2.76 billion euros, up 14 percent over the same time last year. Prior to issuing its third-quarter warning earlier this month, Wall Street had expected SAP to post revenues of 2.86 billion euros.

Sales of SAP's software and software-related services rose to 1.99 billion euros in the third quarter, up 15 percent over last year. And revenues of software not tied to SAP services climbed to 763 euros, a 7 percent increase. But the company's net income fell to 388 million euros, or 35 cents a share, in the third quarter, down from 408 million euros a year ago.

The company, which dealt investors a blow a couple weeks ago, when it issued its third-quarter warning and reduced its revenue forecast for the quarter, offered no reassurances to shareholders in this latest report.

In fact, SAP nixed its revenue forecast for the year--in essence yanking away investors' security blanket. Shareholders often find great comfort in the revenues and earnings forecasts that companies provide for the current and upcoming quarters.

In a statement, SAP said:

In light of the uncertainties surrounding the current economic and business environment, the company decided to no longer provide a specific outlook for non-GAAP software and software-related service revenues for the full year 2008.

However, with recent cost savings initiatives in place, the company expects the full-year 2008 non-GAAP operating margin, which excludes a nonrecurring deferred support revenue write-down of 180 million euros from the acquisition of Business Objects and acquisition-related charges, to be around 28 percent, at constant currencies, if the company can increase non-GAAP software and software-related service revenues, excluding a nonrecurring deferred support revenue write-down from the acquisition of Business Objects, in a range between 20 percent and 22 percent, at constant currencies for the full year 2008.

The current woes for SAP began in the second half of September, taking the technology titan by surprise, given the speed and depth of the cutback in customer orders.

Meanwhile, SAP's archrival, Oracle, edged up in morning trading to $15.88 a share, gaining less than 1 percent during intraday trading.

SAN FRANCISCO--Oracle on Monday unveiled a new open enterprise software application designed to improve the way users collaborate and communicate on projects.

Oracle's Beehive is a 3-year-old project that the acquisition-happy software giant built from scratch. The goal is to take a company's setup, in which various communication and collaboration software applications from a number of vendors are running on an army of servers, and integrate the offerings into one Beehive system, Charles Phillips, Oracle co-president, said during the company's annual Oracle OpenWorld developers conference here.

Beehive seeks to take communication software, from e-mail to instant messaging to chat, and the various security rules, databases and storage that are tied to each product on separate servers, and integrate them with few servers on one platform. For example, one security rule would be set to handle disparate functions across the servers, yet the user interface would appear the same to users, even though they may be using different instant-messaging applications.

Collaboration features are also built into the Beehive software, which allow users to add members to their collaboration team, once the new member has accepted the invitation. Once members have been added to the collaboration team, the software will automatically populate their calendar with the team's meetings dates, they will be added to the team's e-mail loop and will be able to share documents, video, and other materials through Beehive's team workspace feature.

During the event, Phillips briefly shared the stage with swimmer and Olympic gold medalist extraordinaire Michael Phelps, who discussed his determination to set a record for the number of gold medals earned. Phelps took home eight gold medals from this year's Beijing Olympics and has 14 career gold medals.

As for the buttoned-down Phillips, he joked that he was relieved that he and Phelps didn't have to don swimsuits.

Michael Phelps (left) and Charles Phillips at Oracle OpenWorld.

(Credit: Dawn Kawamoto)

Other news coming out of OracleWorld included the following:

• Oracle officially added two industry-specific business units to its acquisition-happy approach to widening its breadth of applications for targeted sectors. One will include an insurance business unit, which was recently bolstered by the company's acquisition of Skywire Software, and the other is a health sciences business unit.

• The company unveiled an update to Oracle E-Business Suite 12, with a preview of E-Business Suite 12.1. The latest version will include enhanced financial applications, with an emphasis on offering more global financial management capabilities, as well as adding supply chain and manufacturing features.

• The recent acquisition of middleware vendor BEA Systems has met its integration milestones and product road map laid out in July.

ZDNet video: Oracle unveils Beehive
At Oracle OpenWorld in San Francisco, Oracle President Charles Phillips
and Chuck Rozwat, the company's executive vice president of product
development, talk about the open, integrated communications system.

Oracle reported improved quarterly earnings Thursday, in part fueled by sales of its Fusion middleware.

Investors applauded Oracle's first-quarter performance, sending its stock up in after-hours trading to $19.20 a share. During regular trading, Oracle closed at $18.75 a share--up nearly 3.6 percent for the day.

Oracle posted net income of nearly $1.1 billion, or 21 cents a share, for the period ending August 31, up 28 percent from the same period a year ago. Excluding charges, Oracle posted earnings of 29 cents a share, beating Wall Street's estimates by 2 cents a share, noted Brent Thill, an analyst with Citigroup Global Markets.

Revenue rose to $5.3 billion in the first quarter, up 18 percent from the year ago period. And new software licenses, a figure investors use in gauging the health of the company, increased 14 percent to $1.2 billion in the quarter over last year. New software licenses accounted for 23 percent of Oracle's overall revenue.

"More and more Oracle database customers are buying our integrated suite of standards-based Fusion middleware to modernize their computing environment," Charles Phillips, Oracle president, said in a statement.

But Thill noted that the first-quarter growth for Oracle's enterprise applications business was down 12 percent, far less than his projections for the company.

Going forward, however, Thill predicts Oracle will post at least a 14 percent growth in license revenue in the second quarter when compared to year ago figures, as well as an 18 percent in overall revenue.

Oracle on Tuesday announced plans to acquire applications management software maker ClearApp.

The acquisition, which is expected to close by the end of the year, aims to enhance Oracle's lineup of Enterprise Manager products. ClearApp's technology is designed to allow customers to manage applications built on service-oriented architecture (SOA) platforms.

ClearApp's software aims to provide a greater view into a company's business services spread across all related application components.

"As customers deploy more SOA-based applications, the task of effectively managing them becomes paramount," Leng Leng Tan, Oracle's vice president of applications and systems management, said in a statement.

Terms of the deal were not disclosed.

Oracle named Jeffrey Epstein as its new chief financial officer on Wednesday, marking its fourth CFO since its long-time bean counter Jeff Henley retired from that post four years ago.

Epstein, the former CFO of Oberon Media, will join the database and enterprise software applications vendor on September 8. Epstein will replace Safra Catz, who will remain an Oracle co-president and board director.

Epstein will report to Catz and assume responsibility for finance, the controller's office, finance operations, tax, treasury, real estate, investor relations, audit, and customer leasing.

Catz is returning to the co-president's role full-time, after a nearly three-year run as Oracle's CFO and co-president. She assumed the CFO role after former Microsoft executive Greg Maffei abruptly resigned from the post after a brief four months.

Maffei left Oracle in November 2005 to take a CEO post at Liberty Media. He had earlier replaced Oracle CFO Harry You, who resigned after a nine-month stint to join BearingPoint as its CEO.

In naming Epstein as its new CFO, the company's founder, Larry Ellison, said in a statement: "Jeff's expertise in global operations and finance will further strengthen Oracle's senior management team...We look forward to having him join us as our new CFO."

Oracle upped the ante in its lawsuit against rival SAP on Monday, claiming in an amended complaint that SAP's CEO and other top executives were aware of alleged illegal downloading of proprietary software and documents before, during, and after its acquisition of third-party support and maintenance company TomorrowNow.

The amended complaint broadens the allegations raised by Oracle in its initial lawsuit in March 2007. In that initial lawsuit, Oracle alleged that its enterprise software applications rival acquired TomorrowNow (TN) to not only woo away its PeopleSoft customers who needed maintenance and support, but to also use those customers' contracts with Oracle to access its proprietary support software and documents beyond what those customers' contracts allowed.

After conducting depositions and gathering documents in the case, Oracle alleges SAP CEO Henning Kagermann and SAP's top executive team, otherwise known as the executive board of directors, knowingly made the acquisition of TomorrowNow without having confirmed that TomorrowNow was not infringing on Oracle's intellectual property rights, according to the amended lawsuit.

The amended lawsuit further alleges:

The pre-deal negotiations with SAP TN reveal the breadth of SAP AG's knowledge - and its lack of concern - about SAP TN's thefts. Based on repeated warnings about how SAP TN's business model likely relied on illegal use of Oracle software, SAP America and SAP AG asked for "a representation regarding the infringement of PeopleSoft's intellectual property rights...that...would survive indefinitely...(and) would not be subject to any basket or cap on indemnity."

But SAP TN's two shareholders, Seth Ravin and Andrew Nelson, refused to make any representation that SAP TN had respected PeopleSoft's (soon to be Oracle's) intellectual property rights. Instead, Ravin reminded SAP of "discussions that were had regarding the increased likelihood of SAP being the subject of a lawsuit as a result of the very public and very aggressive move to offer alternative support to Oracle/PeopleSoft clients."

...In the end, the "appropriate compromise" was that SAP TN offered no assurances whatsoever that it had respected Oracle's intellectual property rights, and instead gave an indemnity from Ravin and Nelson, totaling $2 million to cover costs relating to SAP TN's violations of Oracle's intellectual property.

But a spokesman for SAP contends: "This amended complaint beats many of the allegations of Oracle's amended complaint filed last year. These are strictly allegations and have not been proved. We will have a filing by September 11, in response to this recent amended complaint."

He added that SAP "will not litigate the case in the press."

After SAP completed its acquisition of TomorrowNow, attorneys for SAP AG and SAP America allegedly told SAP TomorrowNow in 2005 to cease downloading Oracle support materials and combining them with TomorrowNow technologies in master "libraries." Instead, SAP TomorrowNow was instructed to create specific folders to house the downloads for each new customer. But allegedly no instructions were provided on how to separate the existing combined Oracle and TomorrowNow materials in the co-mingled libraries.

The case is set to go to trial in the U.S. District Court for the Northern District of California in February 2010.