Subscriber Base

By Renee Boucher Ferguson  |  Posted 2005-01-26 Print this article Print

Ellison said Oracle will continue to grow organically through its subscriber base that keeps renewing software licenses year after year. "We dont know any way to keep it from expanding," he said. Based on Oracles subscriber base, newly enhanced by the PeopleSoft acquisition, and the assumption that it can maintain loyalty from most of those customers, the company said Wednesday that it expects 2005 earnings to grow 24 percent to 62 cents a share. And in fiscal year 2006, it expects earnings-per-share growth of 22 percent to 28 percent, or 76 cents to 80 cents per share. Because Oracle "throws off huge amounts of cash," its best way to utilize the surplus is through more acquisitions, according to Ellison.
"Someone said [to succeed in business] you have to get big, get niched or get out. Our strategy is to get big," Ellison said. "Were already number one in database and number two in application server, and growing. The combination of organic growth and one strategic acquisition will put us in a good position."
During Oracles trial last year against the U.S. Department of Justice that looked to block Oracles takeover of PeopleSoft, it was revealed that application server provider BEA Systems Inc. was a high priority acquisition target for Oracle. About a dozen other companies were researched as additional possibilities. A big goal for Oracle coming into the merger with PeopleSoft was to retain 90 percent of PeopleSofts product development and support teams in order to provide continuity to PeopleSoft users. Oracle has committed to developing the next iterations of PeopleSofts and JDEs suites, and to supporting the applications until 2013. It also plans to develop a super suite, Project Fusion, available by 2008. According to Safra Catz, co-president of Oracle, 96 percent of PeopleSoft developers to date have accepted Oracles employment offers, as has more than 90 percent of the support staff. "Weve been getting a lot of culture questions," Catz said. "Oracle is a developers organization at the core. At PeopleSoft, there is that same respect for developers. They felt that—thats why we think all our offers are being accepted." On the sales side, Catz said Oracle retained "the best of the best," and the company plans to hold a combined sales force conference this weekend. Overall, Oracle laid off about 5,000 PeopleSoft, and some Oracle, employees. While the beginning integration work has been accomplished, according to Catz, there is still a lot of work to be done, including consolidating facilities and completing back-office integrations. Check out eWEEK.coms for the latest news, reviews and analysis about productivity and business solutions.


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