Kinder, gentler Oracle says it's changed, and now wants you to succeed
Only took 'em 46 years …
Oracle has declared it has changed its culture and is now "totally focused on our customers' success."
The 800-pound gorilla of the database biz was founded in 1977 and in the 46 years since has earned a reputation as the industry's most vigorous auditor of software licenses – a stance that has created its own industry, dedicated to compliance, and led to Big Red's enforcement division coloring many customers' perceptions.
But on the Q4 2023 earnings call today, CEO Safra Catz said Oracle has changed its spots.
"Customers are choosing to run on Oracle infrastructure for all their requirements – be they new services like AI training, or services we're known for, like database and Java," she told investors. "To complement the technology, we've changed our culture such that we are totally focused on our customers' success.
"That partnership spirit starts with engineering, as we work hand in hand with companies as they try out our technology, and continues all the way through their success with us. There's no question that this close partnership with our customers has led to our success. As part of that, we've also created an organization called customer success services, or CSS."
Oracle has previously touted [PDF] "Advanced Customer Success Services." We asked what's new about CSS and were told Oracle doesn't yet have more to say than Catz's remarks.
The CEO said the CCS org "ensures that customers get the most value from their Oracle purchases, from planning to activation to implementation to support to anything else they need to succeed.
"We think this unique approach, which customers already tell us they love, ultimately drives overall customer satisfaction. And that results in higher renewal rates, expansion rates, and references."
The financial results support those assertions. Q4 revenue was $13.8 billion, up 17 percent year-on-year, while full year revenue of $50 billion was an 18 percent year on year increase – even without the $500 million a year the biz used to score in Russia before shuttering local operations. Quarterly net income of $3.32 billion represented four percent growth. Annual net income of $8.5 billion was a 27 percent jump.
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Catz reeled off a series of substantial double digit increases in Oracle's cloudy businesses for the quarter, but the full year 17 percent revenue growth for "Cloud services and license support" offers a better indicator as the $35.3 billion revenue for the year was 71 percent of overall revenue – the same result as recorded for FY2022.
The CEO was asked how Oracle will control capital expenditure in the new financial year, and revealed the Big Red cloud has a new infrastructure design. "Our original landing was 12 racks," Catz said. "We're moving to ten racks to have all the services. We're just continuing to sort of miniaturize our capabilities and it's giving us enormous efficiencies and cost savings."
Chair and CTO Larry Ellison weighed in with his view that Oracle's status as both an application vendor and cloud operator gives it unique advantages.
"We use our infrastructure and build applications with it. So, we learn a lot about how we can improve our infrastructure by building lots of applications – enterprise-scale applications – on top of our infrastructure," he said. "So, we have this continuous feedback loop. We're building applications, obtaining insights, making improvements in our productivity.
"We're the only company with that continuous feedback loop. And I think it gives us a huge competitive advantage in technology. It's why we have technologies that other people don't have."
Oracle shares popped six percent on news of the results, as annual revenue topped analysts' expectations by around $10 million and earnings per share of $1.67 were around nine cents higher than anticipated. ®