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Rocela responds to Oracle Q3 results: Growth in earnings indicates tech spend recovery, but gives concern to strategic vendor managers

Edinburgh, 29th March 2010 - In response to Oracle Corporation's Q3 earnings announcement, Rocela, one of the largest independent Oracle consultancies working with national and global clients, today suggested that strategic vendor managers in large organisations should be aware of the potential impact that Oracle's increased dominance in the market may have. While the increase in earnings marks a turning point in what has been a lean time for IT spend, there are still challenges to be faced by Oracle's user community.

Beating its own forecast from last quarter and also Wall Street estimates, Oracle reported a 13% increase in new software licenses, with its applications business reporting an impressive 21% increase in new license sales. Support and maintenance fees also grew by 13%, illustrating that businesses have once again turned their attention to software.

Oracle's acquisition of Sun MicroSystems in January this year impacted the results, but Safra Catz, Oracle's Chief Financial Officer suggested that the Sun integration was going to plan, that profit goals for FY11 would be met, and Sun would be accretive to earnings by £1bn in its full first year.

However, Oracle customers have expressed concerns that the acquisition has - and will continue to - impact on market competitiveness, as Martin Mutch, CEO of Rocela explains:

"Strategic vendor managers must now approach their relationship with Oracle with more consideration, but this can ultimately lead to positive change, by enabling them to build a relationship with Oracle that suits their terms. With the closer integration of systems and hardware and focused R&D spend, Oracle, combined with Sun, should be seen as an ally, but Oracle discount hunters may have a battle, as Oracle is bullish about its critical Q4 outlook."

"Overall, Oracle's trading results reflect what Rocela is seeing in the high-end enterprise market. Clients are still cautious about how Oracle will handle the acquisition of Sun but we are seeing a definite bounce back in the economy as enterprise budgets get freed up," observes Mutch. "A lot of the Oracle growth in new license sales is coming from ULA's (Unlimited License Agreements) for both technology products and applications. EMEA growth is much slower than the US markets although we typically see this type of lag even with our global clients."

Delays in Fusion, now scheduled for release in H2 FY10, have not dampened applications growth, which when benchmarked against SAP declining sales, is impressive:

"There are indications that Oracle is ripping out inefficiencies quickly and we expect Oracle to gather enterprise level traction over the next months. Oracle clients will be comforted by strength of progress but such strength will add to fears of lost vendor leverage and many enterprise clients are currently reviewing their strategic vendor management strategies," concludes Mutch.

- Ends -

About Rocela
Established in 2002, Rocela is the UK's fastest growing independent Oracle consultancy. It is now a global leader in advisory consulting for licensing, cost management and compliance, helping private and public sector customers with complex Oracle environments get the best value out of their Oracle investment.

The company is headquartered in Edinburgh with offices in Knutsford and London. Rocela's growth has been recognised by numerous industry awards such as the Deloitte Technology "Fast 500" EMEA 2007-2009, Investor In People 2008, UBS Fastest Growing Venture Backed Business in UK and The Ernst & Young Entrepreneur of the Year.

For more information, please visit www.rocela.com

Laurie Glimmerveen
Wildfire PR
0208 3394420
[email protected]

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