Larry Ellison Shows His Cards: Oracle ERP Revenue Could Reach $30B

Reveling in a blowout fiscal Q4 that saw Fusion ERP revenue soar 46%, Oracle chairman Larry Ellison said Fusion ERP could ultimately become a $20-billion business and Oracle’s NetSuite ERP could eventually reach $10 billion in revenue.

On my Cloud Wars Top 10 weekly rankings, Oracle is #6 and certainly strengthened its case with Q4 numbers that were impressive across the board.

“As people migrate to Oracle Fusion ERP and smaller companies migrate to NetSuite ERP, these are both enormous businesses,” Ellison said on yesterday’s fiscal Q4 earnings call.

“Fusion ERP is certainly [going to be] much bigger than $10 billion, and NetSuite bigger than $10 billion. Fusion is probably [going to be] bigger than $20 billion as these businesses mature.”

That would add up to future cloud ERP total of $30 billion, which puts an aggressive marker way out there for primary rival SAP to think about. And that’s always part of the Ellison strategy: set audacious goals and, while people are laughing at them, figure out ways to turn those far-flung claims into reality.

While the Q4 growth rate for Fusion ERP stood out as exceptional, Oracle reported powerful growth numbers for all of its mainstream business applications, particularly where compared to their fiscal-Q3 numbers:

• Fusion ERP Q4 revenue up 46% versus 30% in Q3;
• Fusion HCM Q4 revenue up 35% versus 23% in Q3; and
• NetSuite ERP Q4 revenue up 26% versus 24% in Q3.

On the earnings call, CEO Safra Catz said that those three “strategic back-office cloud applications” now have an annualized revenue run-rate of $4.4 billion, which means that in Q4 they totaled $1.1 billion.

“Our back-office cloud application revenue is not only bigger than our nearest competitor”—that would be SAP—“but also growing more than twice as fast.”

Asked by an analyst about regional demand for cloud applications, Catz said, “As far as where it’s happening, I have to tell you it is so broad-based, it is a worldwide phenomenon for us. Fusion and NetSuite are just chugging along. It was an incredible Q4.

“And Q1 looks enormous.”

I was really struck by that statement from the typically reserved Catz—“And Q1 looks enormous”—on the heels of a quarter in which Fusion ERP jumped 46%. It appears to mean that she’s not looking at Q4’s 46% as an aberration or simply a one-time spike.

We’ll go into some further detail about how Oracle’s applications surge ties in with other parts of their business in further analyses later this week.

But without question, Q4 was a great victory for Ellison and Catz. And anyone who chooses to laugh at Ellison’s projection of a $30-billion ERP business across Fusion and NetSuite might want to take a look at history to see just how often Ellison’s seemingly outrageous claims have a way of somehow coming true.

Disclosure: at the time of this writing, Oracle and SAP were among the many clients of Cloud Wars Media LLC and/or Evans Strategic Communications LLC.