Oracle Corp. (ORCL) and Wipro Ltd’s (WIT) consulting, system integration and outsourcing business, Wipro Technologies, jointly announced to launch new solutions on Oracle’s next generation Fusion Applications.
 
Oracle provides Oracle Fusion Middleware (built on Java technology platform) that includes application servers and application grids, business intelligence, identity and access management, content management, portal and user interaction, service-oriented architecture suite and business process management, data integration and development tools.
 
Wipro pointed out that it has made significant investments in Oracle Fusion applications. These investments include initiatives for product development and strategies. Under the joint initiative, Wipro will provide functional business applications and technical foundation architecture training focused on application co-existence, integration, customization and deployment of best practices.
 
Wipro is expected to have the first mover advantage from this joint development and expand its leadership position in the application market.
 
The new solutions will benefit users on a wide range of applications portfolio that includes Oracle Applications Unlimited products (e.g. Oracle E-Business Suite, Oracle PeopleSoft, and Oracle CRM), with automated data migration and synchronization with Oracle Fusion Applications. This will enable them to execute end to end business processes in a cost effective and timely way, thereby ensuring better execution.
 
As the premier database vendor, Oracle is benefiting from an improved product road map. Oracle will also benefit from the launch of Project Fusion, an upgraded business application software from Oracle.
 
Oracle Fusion Applications appears to be creating significant interest in the industry and we expect it to achieve a higher momentum in the long term, attributable to its ability to lower information technology costs and deliver a high quality of service, given its add-on products.
 
Oracle also unveiled the Sun Oracle Database Machine using Sun’s hardware components and FlashFire technology.
 
Moreover, management remains upbeat about Exadata V2, which has almost tripled sequentially in terms of revenues and addresses both traditional data warehousing applications and transaction processing applications. The Exadata database machine product continues to win new customers.  Oracle anticipates that Exadata pipeline will grow to $1.5 billion in 2011, up from the previous expectation of $1 billion.
 
Management plans to spend $4.0 billion for research and development in fiscal 2011, which will likely boost the company’s product offerings. In fiscal 2010 and 2009, the company spent $3.3 billion and $2.8 billion, respectively, on R&D or 12% of total revenue.
 
The company’s new offerings are likely to help it garner share from Microsoft, SAP and Teradata in the database market.
 
Oracle’s first quarter 2011 earnings and revenues easily outpaced the Zacks Consensus Estimates on the back of strong new software license (sales to new customers) sales and growth in hardware sales, driven by the acquisition of Sun Microsystems in January this year.
 
Earnings (excluding one-time items but including stock based compensation expenses) of 39 cents per share were up 34.5% from the year-ago quarter of 29 cents, and 4 cents above the Zacks Consensus Estimate of 35 cents. First quarter total sales were up 48.4% year over year to $7.50 billion and surpassed the Zacks Consensus Estimate of $7.29 billion.
 
Total revenue was above the high end of the company’s guided range. Moreover, the growth in new licensing revenues and earnings per share was encouraging and remained well above management’s expectation.
 
Oracle shares currently have a Zacks #2 Rank (Buy), though its longer-term recommendation is Neutral.
 
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