How will Oracle manage the shift to cloud revenues?: Oracle has begun reporting new software license revenues and cloud subscription revenues as a combined total. In Q2, the take was up 17 percent to about $2.4 billion. During the conference call, co-president and CFO Safra Catz revealed that cloud sales accounted for $230 million of that.
The subscription model is common among cloud vendors but also a departure from Oracle's comfort zone, which has long consisted of large up-front perpetual license sales, following by predictable annual maintenance payments.
With cloud subscriptions, support is baked into the per-user, per-month pricing. But Oracle's traditional maintenance business is its lifeblood, carrying extremely high profit margins and taking up nearly half of all revenue in Q2.
While Oracle will clearly seek to maintain some type of parity between cloud subscription pricing and on-premises licensing in order to preserve its margins, making the shift could still be tricky.
When asked by an analyst whether Oracle's on-premises software maintenance revenues will take a hit as cloud sales rise, Catz stood firm, saying the cloud is "just not going to have a material impact."
"Theoretically, [regular maintenance revenues] might not grow as quickly," she added. "But at this point, we've got a long way to go. So we expect that number to grow and our SaaS number to grow simultaneously at much higher percentages because it's a smaller base." Oracle is also enjoying extremely high renewal rates for maintenance, Catz said.
When will Oracle database 12c arrive and what will be the impact?: Ellison had previously said that Oracle's next-generation database, version 12c, would be arriving in the market either late this year or early next.
But at the OpenWorld conference a few months ago, Oracle announced that the release date would be sometime in "calendar year 2013," a wording that gives Oracle some additional breathing room if required.
On Tuesday's conference call, Ellison discussed 12c but didn't firm up a launch date, instead focusing on extolling the release's new features, calling it the first database "designed for the cloud."
That's because Oracle has incorporated the concept of multitenancy, an architectural approach long used in SaaS (software as a service), where many customers share a single application instance with their data kept separate. This gives SaaS vendors the ability to apply upgrades and patches to all of them at once, among other benefits.