Enterprise software titan Oracle (NASDAQ:ORCL) reported impressive first-quarter results yesterday evening -- impressive enough to take the market's focus off subprime and residential housing woes for the time being. Few firms have the clout to set the tone for the overall stock market, and this technology bellwether may just be getting warmed up as it outgrows the competition.

An acquisition spree over the past several years is definitely paying off for Oracle. The buyouts have had the obvious benefits of taking out archrivals such as Peoplesoft, Seibel Systems, Hyperion Solutions, and an array of niche competitors, but they have also allowed Oracle to set its sights on the largest players in software licensing and related services -- namely, SAP AG (NYSE:SAP), IBM (NYSE:IBM), and Microsoft (NASDAQ:MSFT).

Fellow Fool Anders Bylund recently highlighted some of Oracle's past digs at the competition, and while the first-quarter earnings conference call had a more muted tone when dissing the peer group, mercurial company helmsman Larry Ellison did boast of plans to pass IBM in terms of market share later this year. He also suggested that SAP's NetWeaver business application has all but disappeared from the market, and mentioned that Microsoft's middleware business is difficult to estimate because it is "embedded in Windows."

The numbers continue to speak for themselves at Oracle. First-quarter sales advanced 26% and earnings grew 28%. Better yet, new software license revenue grew 35%, well ahead of the 23% growth in license updates and product support and the 25% improvement in services revenue.  Management explained it by noting that its installed base is growing, which only leads to lucrative product updates and related services down the road.

"Broad-based strength" in the business is right. Free cash flow is about $0.50 per share, which is about three times the EPS of $0.16 per share, demonstrating Oracle's prodigious cash-flow-generating capabilities. The stock hit a new 52-week high on the solid first-quarter results, and at about 18 times analyst projections for this year, the valuation is by no means unreasonable -- especially given the company's status as a market leader with favorable industry trends at its back for the time being. In other words, Oracle continues to have reason to gloat, and the best may be yet to come.

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Microsoft is a Motley Fool Inside Value recommendation.

Fool contributor Ryan Fuhrmann is long shares of Microsoft but has no financial interest in any other company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.