Oracle’s ERP cloud and the Financial Management Suite
Earlier in this series, we discussed the recent announcement of Oracle’s (ORCL) position as a leader in access management. Out of 11 offerings evaluated, Oracle ERP (enterprise resource planning) Cloud ranked the highest in the ability to execute as well as completeness of vision. The strategic acquisition of Netsuite also benefited Oracle’s position in the ERP space.
Oracle offers solutions in nine market areas around the broader categories of HCM (human capital management), ERP, and CRM (customer relationship management). Drawing Salesforce (CRM) into the picture, Oracle’s CTO, Larry Ellison, noted, “Salesforce in contrast only competes in three of these nine market areas.”
Oracle’s ERP offerings’ performance in fiscal 4Q17
Ellison added that ERP is the largest application market—not CRM. Its leadership position in the ERP space could benefit Oracle’s position in the SaaS space. In calendar 4Q16, ERP and collaboration grew the most within the SaaS space. ERP reported 40% YoY growth, and collaboration saw 30% growth.
In fiscal 4Q17, Oracle’s ERP grew 156%, which does not include NetSuite’s contribution. Its ERP has an ~$1.2 billion annualized run rate. Oracle’s Fusion HCM grew 96%.
Highlighting how Oracle’s HCM growth rate is better in comparison to Workday (WDAY), Oracle noted that it is “more than twice the growth rate of Workday.” Oracle’s other front-office offerings also reported double-digit growth rate.
The above presentation shows that the ERP space is expected to grow 7.2% annually to reach $41.7 billion by 2020. This growth bodes well for Oracle, which has a leading position in ERP. ERPsaw the greatest growth in the SaaS space. Notably, SaaS is the most highly deployed global cloud service.
In the last 12 months, Oracle returned $6.1 billion, with $3.5 billion through share repurchases and $2.6 billion in dividend cash to its shareholders.
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