Ellison: Oracle will save additional billion

Oracle's chief executive says his company is on track to save another $1 billion this year by using its own business software.

2 min read
Oracle chief executive Larry Ellison on Tuesday said his company is on track to save another $1 billion this year by using its own business software.

"In the very first year we put in (Oracle's 11i applications software), we've saved $1 billion," said Ellison. "In year two, we?ll save $2 billion, and in year three, we?ll save $3 billion...While doing all of this, we have cut our IT budget in half."

Ellison made his comments at Oracle Apps World, a company-sponsored trade show being held in Paris. He reiterated his message that by using Oracle 11i, the company?s heavily touted suite of Web-based business management software, Oracle customers will also reap the same benefits in cost savings and business efficiency and will face less of a systems integration burden.

Huge cost savings reaped through the use of his company's Web-based software is a familar theme for Ellison. The outspoken executive made similar claims late last year.

Oracle recently reported a blowout second quarter, surpassing analysts? expectations and predicting a strong quarter ahead.

Partly driving Oracle's revenue growth for the quarter was a 66 percent jump in sales of its business applications software, while revenue from consulting and support services grew 9 percent in the quarter.

However, Ellison may be turning up the volume on his pitch in an effort to keep application software sales on track. Last week, at least one analyst questioned Oracle's ability to dodge the dot-com slowdown and continue to grow its software business.

Morgan Stanley Dean Witter software analyst Chuck Phillips last week questioned how long Oracle could sustain its database momentum, given the fact that at least 30 of Oracle's sizable dot-com database customers have gone out of business. Phillips estimated that about 10 percent to 12 percent of Oracle's database license revenue came from dot-coms last year. News of the report drove Oracle shares down 13 percent last Friday.

Oracle shares rose $1, or more than 4 percent, to $24 in early trading Tuesday.

Even prior to its release last spring, Oracle had been busy pushing the 11i software suite, touting the latest version as a one-size-fits-all package for managing a company?s marketing efforts, sales force, manufacturing, financials and Internet business efforts.

Ellison went on to claim that since there?s less integration work involved to install the 11i suite, companies? IT budgets will decrease dramatically.

"We don?t want to sell parts and labor, we want to sell you the (whole) car," he said. "We worked very hard to be the first car company."

Ellison on Tuesday said consulting is going to become a smaller part of Oracle?s overall business, since the company's 11i suite requires little systems integration. "There?s very little labor" involved to implement 11i, he added.