Oracle Corp is being proactive about boosting its profits and is relying on the work it has put in to grow its market share paying off, rather than waiting for a revival in technology spending.
Although its $19bn-worth of acquisitions has clearly been about increasing market share, president Charles Phillips reaffirmed its strategy at an investor meeting this week. Right now it is about gaining market share, Phillips said. We think our destiny is up to us. We are not waiting for a big acceleration in IT spending.
Phillips also indicated that Oracle’s acquisition strategy is starting to pay off. He said the company is on target to achieve its goal of growing annual earnings per share by 20%. He also said the company is taking market share from IBM and SAP.
He said new business is expected to account for 15%, but the vast majority will come from acquisitions. He said the company will continue to making acquisitions but they are likely to be small to medium sized deals.
He also said fiscal 2007 would see an improvement in margins, attributing a decline in the fourth quarter of 2006 to acquisition-related costs and one-time expenses.
Phillips’ buoyant predictions come in the wake of unexpectedly good fourth-quarter results which saw profitability rise on the back of strong software license revenue, suggesting that its acquisition-based growth strategy was starting to pay off.