Oracle sees software growth amid weak hardware sales

Thu Sep 20, 2012 9:04pm EDT
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By Jim Finkle and Nicola Leske

BOSTON/NEW YORK (Reuters) - Oracle Corp's hardware sales are expected to drop further after tumbling 24 percent from a year ago, the software maker said, as it strives to turn around its Sun computer division amid tight technology budgets.

The company run by Silicon Valley billionaire Larry Ellison reported on Thursday that hardware product sales fell to $779 million in its fiscal first quarter ended Aug 31. It had forecast a decline of 7 to 17 percent.

This quarter it predicted a drop of 8 to 18 percent.

"It's a very competitive market and there is not a lot of strong demand," said Forrester Research analyst Andrew Bartels.

He said rivals including Cisco Systems Inc, Dell Inc, Hewlett-Packard Co and International Business Machines Corp are taking market share away from Oracle in the computer market.

Global Equities Research analyst Trip Chowdhry said his research shows the market began to improve in August, emerging from a "terrible" climate in the first two months of the quarter.

Oracle also reported that new software sales rose 6 percent from a year earlier to $1.6 billion, in line with its own forecasts.

It said that new software sales and subscription revenue would range from 5 to 15 percent this quarter.   Continued...

Oracle CEO Larry Ellison talks during his keynote address at Oracle Open World in San Francisco, California in this September 22, 2010 file photo. Oracle Corp reported September 20, 2012 that quarterly hardware sales tumbled 24 percent from a year earlier as the technology giant struggled to turn around its Sun computer division at a time when businesses are tightening technology budgets. REUTERS/Robert Galbraith