Just because Oracle (Nasdaq: ORCL ) didn't spend much on acquisitions this quarter, that doesn't mean that its 28% sales growth over the year-ago period was organic.
The $105 million cash spent on merger and acquisition activities this time is a tiny drop in comparison to the more than $5 billion bucket of buyout cash Oracle poured out over the past 12 months. And some of those deals are paying dividends of the sort CEO Larry Ellison likes best -- they're helping Oracle steal customers from its main rivals, SAP (NYSE: SAP ) and IBM (NYSE: IBM ) .
President Charles Phillips said that performance-management expert Hyperion, which Oracle bought last April, was "key to getting into many, many SAP accounts" in Europe. He gloated a bit over one unnamed British megabank and a German one, where all-SAP financial management systems shuffled in some Hyperion components. "So all these accounts are becoming SAP and Oracle shops, not just SAP anymore. There's no such thing as an SAP account to us, anyway."
i-flex is a banking services provider that joined Oracle last winter, and is mainly landing deals with major banks in the Brazil, Russia, India, China (BRIC) bloc. Closer to home, Citigroup (NYSE: C ) rolled out an i-flex Flexcube platform worldwide at the end of November. Phillips didn't highlight that deal, possibly because his company didn't push SAP or IBM out of the way there. Still, it's a nice win.
Ellison concedes that Microsoft (Nasdaq: MSFT ) is No. 1 in middleware, and that it's hard to tell whether Oracle is gaining ground on the Redmond Rumblers. It's a huge company with diverse operations, and Mr. Softy doesn't always disclose divisional results with that kind of detail. But other than that, Ellison is feeling fine. "Our database and middleware new license sales grew 28% in Q2," he said. "We continue to take market share from IBM in both product categories." And SAP is growing its applications business at a 15% clip at best, while Oracle reported a 63% improvement in that segment.
Ellison's famed competitive streak is getting plenty of fuel right now. As always, we'll see within a few weeks whether SAP and IBM have any counterclaims to report. You can cherry-pick your disclosures to make anybody look like a winner. So far, Oracle's cherries look mighty tasty.
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