Is Oracle Sliding?

Oracle said weak sales of its traditional database software licenses were made worse by a strong US dollar lowered the value of foreign revenue.

Shares of Oracle, often seen as a barometer for the technology sector, fell 6 percent to $42.15 in extended trading after the company’s earnings report on Wednesday.

Shares of Microsoft and Salesforce.com, two of Oracle’s closest rivals, were close to unchanged.

Daniel Ives, an analyst at FBR Capital Markets said that this announcement speaks to the headwinds Oracle is seeing in the field as their legacy database business is seeing slowing growth.

It also shows that while Cloud business has seen pockets of strength it is not doing as well as many thought,

Oracle, like other established tech companies, is looking to move its business to the cloud-computing model, essentially providing services remotely via data centres rather than selling installed software.

The 38-year-old company has had some success with the cloud model, but is not moving fast enough to make up for declines in its traditional software sales.

Oracle, along with German rival SAP has been losing market share in customer relationship management software in recent years to Salesforce.com, which only offers cloud-based services.

Because of lower software sales and the strong dollar, Oracle’s net income fell to $2.76 billion, or 62 cents per share, in the fourth quarter ended May 31, from $3.65 billion, or 80 cents per share, a year earlier.

Revenue fell 5.4 percent to $10.71 billion. Revenue rose 3 percent on a constant currency basis. Analysts had expected revenue of $10.92 billion, on average.

Sales from Oracle’s cloud-computing software and platform service, an area keenly watched by investors, rose 29 percent to $416 million.

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Oracle Launches OpenStack Platform With Intel

Oracle and Intel have teamed up for the first demonstration of carrier-grade network function virtualization (NFV), which will allow communication service providers to use a virtualized, software-defined model without degradation of service or reliability.

The Oracle-led project uses the Intel Open Network Platform (ONP) to create a robust service over NFV, using intelligent direction of software to create viable software-defined networking that replaces the clunky equipment still prevalent in even the most modern networks.

Barry Hill, Oracle’s global head of NFV, told The INQUIRER: “It gets us over one of those really big hurdles that the industry is desperately trying to overcome: ‘Why the heck have we been using this very tightly coupled hardware and software in the past if you can run the same thing on standard, generic, everyday hardware?’. The answer is, we’re not sure you can.

“What you’ve got to do is be smart about applying the right type and the right sort of capacity, which is different for each function in the chain that makes up a service.

“That’s about being intelligent with what you do, instead of making some broad statement about generic vanilla infrastructures plugged together. That’s just not going to work.”

Oracle’s answer is to use its Communications Network Service Orchestration Solution to control the OpenStack system and shrink and grow networks according to customer needs.

Use cases could be scaling out a carrier network for a rock festival, or transferring network priority to a disaster recovery site.

“Once you understand the extent of what we’ve actually done here, you start to realize just how big an announcement this is,” said Hill.

“On the fly, you’re suddenly able to make these custom network requirements instantly, just using off-the-shelf technology.”

The demonstration configuration optimizes the performance of an Intel Xeon E5-2600 v3 processor designed specifically for networking, and shows for the first time a software-defined solution which is comparable to the hardware-defined systems currently in use.

In other words, it can orchestrate services from the management and orchestration level right down to a single core of a single processor, and then hyperscale it using resource pools to mimic the specialized characteristics of a network appliance, such as a large memory page.

“It’s kind of like the effect that mobile had on fixed line networks back in the mid-nineties where the whole industry was disrupted by who was providing the technology, and what they were providing,” said Hill.

“Suddenly you went from 15-year business plans to five-year business plans. The impact of virtualization will have the same level of seismic change on the industry.”

Today’s announcement is fundamentally a proof-of-concept, but the technology that powers this kind of next-generation network is already evolving its way into networks.

Hill explained that carrier demand had led to the innovation. “The telecoms industry had a massive infrastructure that works at a very slow pace, at least in the past,” he said.

“However, this whole virtualization push has really been about the carriers, not the vendors, getting together and saying: ‘We need a different model’. So it’s actually quite advanced already.”

NFV appears to be the next gold rush area for enterprises, and other consortium are expected to make announcements about their own solutions within days.

The Oracle/Intel system is based around OpenStack, and the company is confident that it will be highly compatible with other systems.

The ‘Oracle Communications Network Service Orchestration Solution with Enhanced Platform Awareness using the Intel Open Network Platform’ – or OCNSOSWEPAUTIONP as we like to think of it – is currently on display at Oracle’s Industry Connect event in Washington DC.

The INQUIRER wonders whether there is any way the marketing department can come up with something a bit more catchy than OCNSOSWEPAUTIONP before it goes on open sale.

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