Oracle boosts local earnings

By ADAM GIFFORD

Database-maker Oracle is holding its own in the tough New Zealand IT market, increasing revenue $800,000 in the year to May, to $44.4 million.

Profit dropped slightly to $7.1 million, according to accounts just filed with the Companies Office.

But New Zealand manager Robert Gosling said he was "extremely happy" with the result because it was driven by double-digit growth in licence revenue - vital to the health of any software company.

"Most of it is related to application sales and the uptake of our RAC [Real Application Cluster] technology. We have over 10 sites running RAC on Linux," Gosling said.

That means Oracle receives a larger share of its customers' spending on technology.

He said Oracle relied more on partners such as CGNZ, Asparona and Mi Services to do implementations, which meant lower consulting revenue but more people in the market selling Oracle products.

Significant contracts during the year included the Otago and Southland District Health Boards, which are building a shared services centre based on Oracle Financials, and a major project at the Accident Compensation Corporation.

ACC has installed an Oracle Receivables system, and is replacing its six-year-old Geac SmartStream system with Oracle Financials.

The $5 million Financials project is in its testing and training phases, and with go live in December.

ACC chief financial officer Phil Burt said it installed Oracle Receivables a year ago to cope with collecting levies totalling $800 million a year from 500,000 employers and self-employed people.

Collection used to be done by Inland Revenue, but the task was handed over to ACC after its brief foray with privatisation under the previous National-led Government.

"SmartStream had no real capability in receivables, which didn't matter when we bought it in 1998 because IRD collected all our debts," Burt said.

"Since then, we increased usage and volume going through the system tenfold. It has performed well, but we kept bolting things on until it stopped."

Gosling said ACC was the first organisation in the region to try the advanced Oracle Receivables software.

"It will allow them to focus on the customers and to integrate with call centres, so all information about a customer is held in the one place."

CGNZ is building the collections system and Asparona is installing the financials.

"We are now looking at other organisations which have sophisticated collections requirements," said Gosling.

Oracle NZ is going through its own re-organisation, following the move by Australia and New Zealand managing director Brian Mitchell into a new role leading merger and acquisition activity and integration in the Asia Pacific region.

This is widely seen as a sign that Oracle believes its hostile takeover bid for PeopleSoft will succeed, despite continued opposition from PeopleSoft management, customers and, for now, shareholders.

Gosling said Oracle chief executive Charles Phillips had made it clear the firm would expand by acquisition and organic growth.

Former NZ managing director Leigh Warren, who had been developing Oracle's Linux business in Asia Pacific, replaces Mitchell.