Oracle president Mark Hurd made some news on the Oracle front today, announcing during a press conference in San Francisco that the company has launched a new version of its human capital management software.
HCM has been kind of a hot topic during the last few years, especially since a spate of acquisitions of companies like SuccessFactors by Oracle’s rival SAP a few years ago, and the IPO of Workday. Oracle got into the act too, acquiring Taleo for $1.9 billion in 2012.
Oracle calls these its HCM Cloud and Talent Management Cloud and put out a press release on it all while Hurd was speaking, saying that the new features would be available to customers immediately.
Hurd spoke in connection with Oracle Openworld, the company’s massive annual conference which is said to have attracted some 60,000 people to San Francisco today. CEO Larry Ellison spoke last night. Of course it wouldn’t be an Oracle press conference without a few digs at the competition, which Hurd delivered. The target in this case was Workday, which, having built a decent business in cloud human resources software, is now also building up its capabilities in corporate finance.
Asked to compare Oracle’s latest offering to Workday’s, Hurd said companies want their HR software to work readily with their corporate finance software. “It isn’t just important to have these HR applications, they also have to work with your financial information,” Hurd said. “That is why Workday has what I think is a fledgling operation to get their HR application working with the accounting system.”
He didn’t stop there. This same desire among big companies to have their applications working together has a lot to do with why Workday and Salesforce.com announced a broad alliance last week.
“Customers want to know how does this work with that,” Hurd said. “They are thinking about how to run the company horizontally.” His reason for making this point, he said, is that this tight integration between HR and finance is something that Oracle does out of the box.
On another topic, I took the opportunity to ask him about the state of the general IT environment, especially in the wake of Oracle’s weird quarterly results last week, in which it announced both a solid beat to the consensus on the bottom line, but outlook that really rattled shareholders the next day. (Maybe they overreacted, because the results weren’t really so bad after all.)
“Our view would be that in Q1 of 2013, we grew our software license business 17 percent, and we followed that with six percent in 2014,” he said. “Many of big cap competitors just have negative numbers. We rolled in with 17 and then six. Our overall software business, including support, grew eight percent, and to be clear, that’s almost all organic. So we’re gaining share and we know that we are.”
So what about that guidance for Oracle’s second fiscal quarter that so freaked out the markets? Hurd reminded everyone in the audience that Oracle grew by 18 percent in the second fiscal quarter last year. “So when you see the paltry forecast numbers for other companies, it tells you how we’re doing relative to the market.”
One other point: However the year may look in January in terms of the outlook for IT spending, it rarely gets better from there. “Most big companies plan their budgets in October and November. Usually they maintain that course during the calendar year. The real pressure is coming up right now, when companies sit down and plan next year. That is the question they’re answering right now. How do they feel about this economy? How do they feel about next year?”
His comments didn’t come in time to move the needle on Oracle shares, which feel by 11 cents today to $33.94. The shares have risen by about two percent this year.