New software license sales were up 12% from the year-ago quarter to $847 million. Sales of Oracle's flagship database software were up 16% compared with last year--though no dollar figure was given--even though the company just began selling its new 10g database in early February, toward the end of the quarter.
Oracle says sales of its Real Application Clusters software, which allows a database to be split up between multiple servers to improve scalability and availability, grew 86% year over year. "Twenty-five percent of RAC sales were on Intel-Linux platforms," CEO Larry Ellison said during a conference call.
Sales of Oracle Application Server were up, but application sales were flat. "It's a brutally competitive business, and there is tremendous pricing pressure," Ellison said of the enterprise application market. Revenue from software license updates and product support was up 17% to $1.18 billion, while service-related revenue was down 11% to $486 million.
Oracle also disclosed that in the first nine months of fiscal 2004 it has spent $43.4 million, including $15 million in the third quarter, for professional services relating to its attempted buyout of PeopleSoft Inc. Oracle began its takeover bid in June at the start of its fiscal year. Oracle and the Justice Department will face off at a trial set for June 10 in federal district court in Northern California to determine whether Oracle's proposed hostile takeover of PeopleSoft violates antitrust laws.
Oracle expects business to continue to "modestly improve" through 2004, chairman and CFO Jeff Henley says. In the current quarter, Oracle expects new license revenue growth in the range of 5% to 15% and total revenue growth of 6% to 10%, with earnings per share of 17 or 18 cents per share.