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Sep 16 2010   10:51PM GMT

Oracle earnings call: Top takeaways

badarrow Barbara Darrow Profile: badarrow

Oracle’s earnings calls are great entertainment. Aside from the usual boasts about profitability there are valuable asides, like Larry Ellison’s impromptu recommendation of Hasso Plattner’s new movie in which Hasso interviews Hasso. Hasso Plattner is co-founder of Oracle competitor SAP AG.
But, back to business. Here are the top five takeaways from today’s Oracle call.

1: Hurd’s aboard
Mark Hurd was there in spades, talking about Oracle’s innovation, its huge R&D budget etc etc. That must have galled the HP partisans who say he gutted that company’s storied R&D machine. Hurd was CEO of Hewlett-Packard until August 6 and was named co-president of Oracle on September 7, setting some sort of land-speed record. One has to assume his severance check cleared.

2: Sun hardware will be profitable, dammit
Oracle co-prez Safra Catz and Ellison both stressed that the company has no qualms about jettisoning non-profitable hardware business to concentrate on higher-margin, pricy “engineered systems” a la Exadata. But, maybe one reason Oracle’s field is so busy extracting fat support and renewal fees on older “commodity” hardware is to transform unprofitable hardware to profitable hardware.

Oracle execs said the company sold three Exadatas to SoftBank, replacing 60 Teradata boxes.

3: Oracle OpenWorld will be a Fusion affair

Ellison told analysts that Oracle OpenWorld 2010 will highlight the much-anticipated and much-delayed Fusion applications. “We’ll announce our Fusion application suite, all the CRM, ERP products, 100% written in Java with social networking, Web 2.0 interfaces” at the big show, Ellison said.

4: Love/hate affair with IBM continues

But maybe with a little more love now. Ellison thanked IBM chairman Sam Palmisano for calling Oracle his number one competitor and said Oracle would like to expand its working relationship with IBM’s gigantic services business going forward. He mentioned IBM’s ability to make “amazing” microprocessors. When Oracle completed the Sun buyout, Ellison said he viewed the IBM of the 1960s as an icon to emulate.

A conspiracy theorist might even say it looked like Oracle might like to cosy up to IBM in order to squash HP–which bills itself as the largest IT provider in the world.  And which is also, btw, suing Hurd for joining Oracle.

5: Hurd hates services

Interesting to hear what a stupid business IT services has become.  Hurd pushed Oracle’s “engineered systems” vision hard as a way to stay out of the sticky services business.

“When you run a big services company, the biggest issue is labor. Incidents need people and the way to automate incidents is through software. When you automate a process, you not only reduce labor but eliminate labor,” Hurd said. “[If you can] build something once and sell it many, many times and do that work in a remote and in an automated way that’s a replacement for labor-based services.”

Those are fascinating words from the guy who engineered HPs $12.6 billion dollar acquisition of Electronic Data Services (EDS) two years ago.

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