Q3 2021 Oracle Corp Earnings Call
And then.
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Welcome to Oracle, a third quarter 2021 earnings conference call now I'd like to turn the call over to Ken Bond Senior Vice President.
And thank you Erika and good afternoon, everyone and welcome to Oracle third quarter fiscal year 2021 earnings Conference call.
A copy of the press release and financial tables, which includes a GAAP to non-GAAP reconciliation and other supplemental financial information can be viewed and downloaded from our Investor Relations website. Additionally, and list of customers mentioned on this customer conference call as well as many others, which are purchase Oracle cloud services or went live on Oracle cloud reach.
<unk> will be also available from the Investor Relations website on the call today are chairman and Chief Technology Officer, Larry Ellison, and Ceos Safra cash as a reminder, today's discussion will include forward looking statements, including predictions expectations estimates or other information that might be considered forward looking throughout today's discussion.
And we will present, some important factors relating to our business, which may potentially affect these forward looking statements forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from statements being made today as a result, we caution you against placing undue reliance on these forward looking statements and we encourage.
You should review our most recent reports, including our 10-K and 10-Q and any applicable amendments for a complete discussion of these factors and other risks that may affect our future results or the market price of our stock and finally, we're not obligating ourselves to revise our results or these forward looking statements in light of new information or future events.
We'll begin with a few prepared remarks, and then I'll turn the call over to Safra Safra.
Thanks, Ken and good afternoon, everyone. We are again reporting learnings 10 day after the end of the fiscal quarter faster than any other company and the S&P 500.
And cloud ERP enabled us to understand our business performing sooner and with greater insight, which is an advantage our customers are rapidly beginning to appreciate.
As you can see we had a great quarter and executed well against our growth plan revenue within line with our U S. D guidance, while EPS beat the midpoint of guidance by 5%.
Our total cloud services and license support revenue for the quarter was $7 3 billion up 5% and U S dollar, 2% and constant currency driven by fusion.
Economists database and our Gen two OCI cloud.
Current revenue as a percentage of total revenue now represents 72% of total comfortable revenue and we anticipate this trend to continue and cloud services growth applications.
Application subscription revenues were 3 billion up 5% and U S dollars, 3% and constant currency, our strategic back office cloud applications now have annualized revenue of 4 billion and grew 24% this quarter.
Including fusion ERP up 27% net suite, ERP up 22% and fusion HCM up 21%.
And for SCOR infrastructure subscription revenues were $4 3 billion up 4% in U S dollars up 2% and constant currency.
Infrastructure cloud services now has an annualized revenue of more than $2 billion, including OCI consumption revenue, which was up 123%.
Economists database was up 55%.
Cloud customer consumption revenue was up over 200%, but on small numbers.
Database subscription revenues, including database support and database cloud services were up 6% in U S dollars and up 3% in constant currency.
License revenues were $1 3 billion up 4% in U S dollars and unchanged in constant currency. So all in total revenues for the quarter were $10 1 billion up 3% and U S dollars up slightly and constant currency.
Operating expenses were down this quarter and non-GAAP operating income was $4 8 billion up 6% from last year.
Q3 operating margin was 47% in USD up 300 basis points from 44% last year and our best Q3 and result in more than 10 years.
The non-GAAP tax rate for the quarter was $16 seven slightly below our base tax rate and as a result of some discrete items EPS was $1 16 and U S dollars.
Up 20% and U S dollars up 16% in constant currency.
GAAP EPS was $1 68, and U S dollars up 113% and up 104% and constant currency.
In the quarter. The GAAP income statement was impacted by a one time net tax benefit of approximately $2 3 billion related to the transfer of certain assets between subsidiaries to.
To facilitate comparison across periods, we have excluded the effect of this event from our non-GAAP calculation.
Net operating cash flow over the last four quarters with $14 7 billion with capital expenditures of $1 9 billion and free cash flow in excess of $12 $8 billion over the same period for the quarter opera.
And cash flow was $3 7 billion up 23% and free cash flow was $3 3 billion up 26% from last year.
We now have nearly 36 billion and cash and marketable securities.
The short term deferred revenue balance was down in constant currency at eight 1 billion, while the short term growth deferred revenue was up 4% and constant currency as you know the difference between the two growth rates is due entirely to timing differences.
And customer payments.
The remaining performance obligation or our PEO balance is 35 point.
$3 billion up 2% and constant currency versus last year.
<unk>, 61% is expected to be recognized as revenue over the next 12 months up from 60% a year ago.
As we've said before we're committed to returning value to our shareholders through technical innovation strategic acquisitions stock repurchases.
And use of debt and a dividend and.
And this quarter, we repurchased more than 64 million shares for a total of $4 billion.
In addition, the board of directors increased the quarterly dividend, 33% from 24.
$2 32 per share.
The board of Directors also authorized an additional $20 billion for the repurchase of Oracle shares.
As I mentioned last quarter, we experienced capacity constraints for OCI cloud services as customer workloads expanded dramatically.
In addition, we continue to land, many new customers, including Suvs and we have some very large users coming online shortly that will require significant amounts of capacity adds.
As a result, we're investing aggressively this quarter.
Q4, both Opex and Capex to prepare for this increase and cloud consumption and associated revenue in FY 'twenty two.
As such we are going to target a four 9% operating margin for Q4.
And this will enable us to continue to deliver double digit earnings growth once again in FY 'twenty two for the fifth year in a row.
Now to the guidance.
Again my guidance today is on a non-GAAP basis and assumes current exchange rates remain the same as they are now which is a 4% positive effect on total revenue and 7% positive effect on the EPS in Q4.
It will look.
And it may look like a positive effect of eight to EPS due to rounding, but it's 7% however.
However, actual currency impact could be different from here at Gov. Total revenues are expected to grow from 5% to 7% and U S dollars and are expected to grow 1% to 3% and constant currency cloud.
Cloud service and license support will grow faster than in Q3, as well and strategic back office cloud applications.
As a result of the increased investment and the quarter non-GAAP EPS in USD is expected to grow 7% to 11% and be between $1 28, and $1 32 and USD non.
Non-GAAP EPS in constant currency is expected to.
B.
Flat to up 4% and be between $1 20, and $1 24 and constant currency.
Capex for Q4 is expected to be $1 billion.
My EPS guidance for Q4 and assumes a base rate of 19%. However, one time tax events could cause actual tax rates for any given quarter to vary, but I expect that in and normalizing for these one time tax events our tax rate.
<unk> will average around 19% or so.
And with that I'll turn it over to Larry for his comments.
Thank you Safra.
Three months ago, Bob Adams posted an article on the cloud Wars web site, and which you quoted <unk> CFO Luca <unk>, making the following statement it and investors conference and I quote.
I have checked.
And we have not lost a single <unk>.
<unk> customer to Oracle unquote.
And in other words after personally chuckling.
On <unk>, Chief Financial Officer could not find a single example.
And after eight P ERP customer moving to Oracle fusion ERP.
Not one.
Perhaps we should have checked a little bit more carefully.
And Q3 alone, we signed contracts totaling hundreds of millions of dollars.
To migrate several very large ERP.
ERP customers to Oracle fusion ERP.
But this was not just in recent Q3 event. This has been going on for a couple of years.
And now going to go.
And present, a window or over a 100 companies and.
And government agencies.
That have already moved from SAP ERP to fusion ERP.
Or are currently on the process of doing so.
On a divided the list.
Customers, who are moving to Oracle fusion ERP into two distinct groups and I wanted to be very precise here.
The first group is moving their entire company to the fusion ERP suite, including core financials with Oracle wall to wall.
Gotcha and group has started deploying fusion ERP applications, but has not yet put in the entire suite and <unk>.
They still be running at.
Financials, and someplace and begun the migration, but they're there and.
And not committed to doing the entire suite as yet.
And the process of doing the entire suite as yet.
Got it.
So let me go from start to lift.
TPS company and industrial manufacturer of railcars in North America replaced out all of the <unk>.
ERP with Oracle fusion and <unk>.
<unk>.
And actual accounting and procurement.
Our enterprise performance management supply chain HCN everything of the fusion cloud complete replacement.
ERP fusion ERP.
G for plc Securities services firm about the world's largest security company by revenue.
A complete replacement of F <unk> III.
And with Oracle ERP.
And Oracle HCM.
First solar.
North America is the only remaining maker of solar panels and United States.
Replaced Sap's as for Canada.
Our Rebbe concur and third party apps all of SAP, <unk> ERP with Oracle fusion ERP Oracle fusion, EPS, Oracle fusion HCM and supply chain management.
Transit wireless.
North American telco.
Completely replaced out at AAP, our three with Oracle fusion, ERP and Oracle fusion HCM.
What Suffolk County Council.
On a complete replacement with Oracle, ERP, Oracle, HCM, and Oracle <unk> ERP and HCM.
EPS is Oracle enterprise performance management.
Wall to wall Oracle.
Whatsapp, it's on a doubtful Nomura safety.
And mix.
On a concrete company and Mexico.
<unk> replaced.
With Oracle ERP and supply chain.
Niagara bottling, and North American beverage manufacturer and private label volume.
On a water.
And replaced with Oracle ERP supply chain and.
Transportation management et cetera.
New Zealand and inland revenue.
Complete at our three replacement with Oracle ERP and Oracle HCM.
University of the entities and Latin America that number one University and Columbia.
Fleet replacement.
For 10 years, replacing it with Oracle ERP HCM APM supply chain sales everything.
Bip and dry Bud.
Travel and transportation company and EMEA.
On electronics whole payment provider for their growth for the roadways, and Spain again replaced.
And was offered a free as forehead and upgrade instead chose Oracle fusion cloud.
Jay Great software and industrial manufacturer software for utilities and power transmission.
And complete S&P replacement with Oracle ERP fusion cloud.
<unk>.
And let's say the second largest mail carrier in Germany.
And complete replacement of RP and replace them with Oracle fusion ERP and the cloud plus supply chain management, Birmingham City County, and City Council.
It's a complete.
Replacements.
Using Oracle ERP Oracle HCM here the biggest they're the biggest <unk>.
City Council and the U K.
Metro Pacific Total waste Corporation, total ROE developer and Asia SAP.
Replacement and got rid of that.
And replaced it with Oracle ERP, and Oracle EPS Africa World Airways.
Let me replace debt with Oracle ERP, APM HCM sales service and marketing.
But telco and thus the Bahrain telephone company.
They had been running for a decade and they move to fusion cloud ERP EPS and SCM.
The other thing and European Logistics, and applied Engineering group will actually whose names and they don't want their name and specifically mentioned they are the largest private company and Belgium.
And are they completely replaced.
Three.
And they thought the cost of moving to and forehead and the cloud was much too high and.
Instead with Oracle Oracle.
<unk> ERP.
Yes.
Total logistic.
Logistics company and Latin America.
<unk> had.
SAP replaced with Oracle ERP STM and sales.
Fedex with Fedex.
Hi.
And.
SAP ERP.
ERP and some places and Oracle ERP and in some places.
They've replaced out all of the or and the process of replacing out all of the SAP.
And ERP and standardizing on Oracle fusion, ERP and supply chain management.
Grupo Bimbo.
Had SAP in subdivisions and Oracle and other divisions, they're replacing out all of the SAP.
And standardizing on Oracle fusion, ERP and supply chain management Western digital.
Complete updates.
Lee replacement they had FHA, what's the digital had SVP of Sandisk.
And <unk> replaced all of that out and have standardized on Oracle fusion and the fusion ERP and the cloud.
<unk> World.
And.
As for.
<unk>, Canada.
SAP HR three day eliminated all of that.
By the way there and in EMEA Marine terminal operator, there they are located and EMEA their global they replaced out all of their SAP.
And standardized on Oracle fusion ERP and the cloud.
<unk>.
And there are semiconductor test and handling equipment company and North America.
And they.
They had a combination of Oracle ERP and ERP.
ERP replaced out all of the SAP ERP.
ERP and our standardized on Oracle.
This one is interesting.
And their name mentioned mentioned, they're a huge magnitude of European.
Our European and.
North American and European manufacturer of Atms.
And Dave.
<unk> replaced out all of that.
And the German subsidiary velocity throughout the world.
And they have standardized on fusion ERP and.
And HCM and laid out and Oracle performance management fusion performance management.
Let's see another company, who is named doesn't want to be mentioned.
And let's see their high tech manufacturer and North America. They replaced our three ERP HCM and.
And standardize on Oracle fusion.
Oracle Oracle fusion in the cloud.
Our belly group.
They are a manufacturer of photo products in the UK and replacing it.
Guess, what fusion ERP console energy.
Utilities company, and Pittsburgh replaced out with Oracle fusion and the cloud Enbridge.
And the Enbridge and the oil and gas multinational based and Calgary, Canada replace out all of.
And it replaced out all of SAP.
With Oracle fusion ERP Gemini industry, Jeff.
Ladies and gentlemen, I and energy there.
They are and led.
Sure.
And on energy.
Transmission system.
The largest and Brazil with Substations, all across Brazil replace debt with fusion ERP food storage and Lee.
Latin America, the self storage company, and Brazil, again got rid of S&P put infusion ERP Grupo Globo there.
And there are media and entertainment Latin Americas largest media and entertainment company replace debt with Oracle ERP and HCM standardized on Oracle ERP and HCM IQ via and then complete our SAP replacement there are manufacturing for our pharmaceutical.
Company and North America.
They've moved away from that SAP is standardizing on fusion and the cloud Korean a healthcare company and EMEA long term care and nursing homes 300000, senior citizens across Western Europe replace debt.
With Oracle fusion.
Net less group Natwest group.
<unk> Natwest, ABN Amro Royal Bank of Scotland, Ulster Bank and more.
And they had a combination of Oracle ERP and SAP ERP. They are replacing out all of the SAP ERP and standardizing on Oracle fusion and the cloud wind tree.
<unk> and telecommunications company, the largest mobile operator and.
And Italy.
And again completely replacing out.
And with Oracle fusion, ERP SCM and Etfs.
Okay.
Now let me go on to the second second and third the companies and New Jersey and these are companies that had started.
Started putting in Oracle fusion modules, but have yet.
If not replace core financials as yet so.
They are buying our supply chain and they are buying our procurement.
Buying our transportation management, they are buying our global trade management, but they have not yet bought oracle financials. So I wanted to be very specific but they are buying lots and lots and lots of fusion product.
And <unk> airline Apollo tyres Akamai.
And adhesive solutions company and the U K are who's commune.
They're needed municipality and central Denmark.
Caesars Enterprise services to give you an idea they bought day bought from procurement and supply chain are big Hospitality company, obviously in North America.
On a separate danaher.
Our product lifestyle and they bought a product lifecycle management there they are a health care company.
Department of education and training.
And Australia across procurement.
DHL with and SAP replacement and some countries. So.
So some countries are still running SAP.
But but the new the new implementations that are going in our and other countries not in Germany as yet.
And other countries are Oracle fusion ERP.
Wow.
<unk> bought supply chain management and transportation management.
FEMSA Board replaced all of SAP and some other subsidiaries and.
<unk> bought supply chain warehouse Madison and supply chain planning.
And again, and then some and some subsidiaries all of ERP and including accounting procurement.
All of that Fujitsu services, a manufacturer and a manufacturer in Japan again.
The parent is running SAP financials, but sales are all over the world are moving to Oracle fusion ERP carrig, Dr. Pepper again that bought supply chain Guardian.
But Budd all of financial services company in North America, but all of ERP Honda.
Log supply, but still runs.
SAP financials, but just recently bought.
And the fusion supply chain fusion on a transportation management.
And as move is moving from on premise to the cloud.
And the tech nor.
And North America, North American company again.
Parents still running.
SAP financials that the subs are running.
Oracle fusion.
Jeff Jackson and life.
Lakshmi cement and I'm not going on.
And with VB faster now Juniper networks Lloyd Lloyds Bank.
Move incorporated Munich re.
The largest food company and the world.
Yes.
But just bought.
Oracle performance management.
News America marketing.
<unk> International.
P G&A.
<unk>.
Public services.
Safety and wireless and Nokia Company Samsonite Puma.
Standard Bank.
Steve Therma Tru doors okay.
On stop right, there, where I'll take up all of the time and you won't be able to ask safra questions.
Okay.
And I don't want to do that.
Okay.
Alright so.
Again, and as the list is actually longer than the 100 plus companies I did read over 100 companies as I'm sure you be painfully aware of.
This is actually longer than the 100 companies that just yet.
Some of our most important winds at our very largest companies and regulated industries, such as banking and utilities.
Who are currently on the process of migrating from SAP ERP to fusion ERP.
Usually ERP preferred not to be publicly named on this call for obvious reasons. They don't want even though even though they are often a reference for us.
Private reference for people, who are considering the same move.
They don't want to be on their name on this call because they want to maintain the best possible relations.
With S&P and even though they are and the process of transitioning away from FHA.
Alright.
And so.
I would like to make one last point and then turn it back over to <unk>.
Specifically, we tried and tried to answer one key question.
How come.
So many customers are moving from SRP SAP ERP to fusion ERP. This has never happened before.
A major migration between ERP vendors.
What would you want to know the answer.
Read the Gartner report.
Comparing oracle ERP to ERP.
Okay.
Please don't take my word for it.
Read the report is very short.
And it's to the point.
Gartner ranked Oracle fusion ERP far and front.
I mean borrowing and you can't find and Magic project, where there is more of a bigger GAAP between number one and number two.
And so Gartner ranked Oracle fusion ERP foreign from all the other cloud ERP systems.
But what's surprising.
And number two.
Is that number III.
SAP is listed among the leaders.
And as listed among the laggards.
Gardner if you read the text Gartner points out and.
And I quote.
One reference customers scored.
And the lower half of cloud ERP vendors.
And I read that again.
Sap's own reference customers scored.
And the lower half of cloud ERP vendors.
On a quote.
SAP.
The one dominant on premise ERP market leader is currently and not competitive and the cloud ERP market.
How could that have happened.
Because.
Never rewrote their ERP systems for the cloud.
Same with 30 year old code.
They never rewrote their ERP system for the cloud and it's too late for them to start now I'll turn it back over to Safra.
Thank you Larry Eric if you could please poll the audience for questions.
Ladies and gentlemen, thank you ask a question. Please press star one on your telephone keypad to withdraw your question press the pound key.
Our first question comes from Michael <unk> with Keybanc capital.
Great. Thanks, so on the color on the ERP and I'd like to switch over to the database you've made meaningful improvements in both cloud customers on <unk>.
And you wanted to two and required.
And for ABB, So sure those improvements enough for now starting to see.
Great.
And are you able to monetize those upgrades to a point, where we'll start to see database growth acceleration.
The answer is I think there is.
No question, you can see a lot of database.
Growth is a lot of database acceleration starting next next year, which we are.
We're a quarter away from but it will be it will be fine and Q4 again, it's autonomous database is growing pretty rapidly.
We expect we.
We expect it really to explode.
And next year and I really remain very very rapid growth next year I'm, not really ready to disclose our plans as to why I think it is going to suddenly spike.
We expect a very very rapid database growth and.
And next year.
Thanks, Larry.
Our next question comes from Mark Murphy with J P. Morgan.
Yes, Thank you Larry.
This essay and replacement wave and feels like kind of a historic moment because that kind of activity.
And it's usually so rare and these are the logos are pretty large.
You are mentioning so what we see coming direct and they're really spectacular logos on non Fedex.
There are some of them are pretty spectacular on there, but we have some that are much larger and much and absolutely shocking.
And I've been alluding to this but sometimes we're in the middle of and 18 months implementation.
And the customer doesn't want and metrics.
If I could mention them all.
Yes.
It's front page news I mean, it's a very big deal Yeah, I agree with you it's a historic event.
And as I think on a long time ago. I said there are two there are two technologies that will drive or oracle's future. One is autonomous database and the other is ERP. We expect we are.
Okay and reading the Gartner report, we are so dominant on our product is so much better than anyone else and product and the cloud.
We expect.
Do you get.
A significant number more than half of Sap's customers will get.
But keeping our own plus plus plus getting a lot of it from the smaller companies like important and lots of them.
So Larry the ones that we see which aren't too shabby and you mentioned DHL and Honda and and Lloyds Bank is that a precursor to moving to Oracle Corp financials eventually.
And I'm just wondering.
Each of Oracle strength is really catalyzing that wave of replacement.
Okay. So there are two lists.
Happy to lift and I read and there are about equal size list, where people that are already moved from SAP and actuals to Oracle financials.
And second list were people that had partially moved to Oracle.
But still we're running SAP financials in some places and other words, we don't consider it a complete win until we replace out if we just sell procurement and supply chain and menu.
And manufacturing and things like that but they still run SAP financials, we don't consider that a complete win as we call our surround strategy, but.
And once you start using our cloud products and compare that with Sap's on premise products, we think <unk>.
And as majority of these companies that have started that journey and we'll finish the journey.
Belmont financials, and the cloud just like they have supply chain and the cloud and procurement and the cloud. So yes, we expect.
Company and we've already seen companies migrate off the second list.
They buy procurement, thereby supply chain and they say, okay, I like that and now I'm going to buy financials.
So yes, we expect all of those or excuse me the vast majority of those customers to eventually standardized on fusion cloud ERP for every day.
Thank you.
Our next question is from Mark Miller with Sanford Bernstein.
Thank you. Thank you very much for taking my question and appreciate the additional color.
That Safra you gave on the call I'd like to turn to OCI Gen. Two.
And hearing about security concerns from consumer Internet companies.
Extent as OCI security technology help you win business with these companies and as consumer Internet a big driver for OCI. Gen. Two also to be clear. This is not about tictoc is there will be other consumer Internet company opportunities. Thank you.
Yes.
Thank you.
There are two things that are interesting about.
One on the security from one is.
We believe securities should be always be turned on and not in other words. There is no light switch security on security off.
We have this thing called Max security zones, and OCI, where you cannot current security asked and that security is always turned on it's a safe place to go inside of OCI No. One has anything like this.
Where security is always turned on and you cannot turn it off you cannot you cannot open up.
Lee Network link that puts your your infrastructure and your data and Jeopardy. That's one fact, so security is always on the second thing is autonomy and it's very interesting.
Because the Oracle autonomous database.
And if autonomous database is not the only autonomous product we have we have autonomous Linux.
Foundation of Ocs, The foundation operating system and side of the OCI network.
Oracle Autonomous Linux Oracle Autonomous database.
No human labor associated with it okay. So we've got products as well that's a huge cost savings. It is but that's not the most important benefit and most important benefit if there's no human labor. There is no human error, if theres no human labor there is no human and this shift there is no opportunity for and insight.
<unk>.
To corrupt the system, there's no opportunity for a user to MS. Configure a system that creates a security vulnerability that would lead to the loss of data. So we think one of the most attractive aspects of OCI other than its high performance low cost all of the everyone everyone likes to pay less and they do with <unk>.
But we.
We do a better job of securing your data than any other cloud vendor, we've seen that be the decisive.
Feature and winning a lot of a lot of these deals with with Isps and end user customers.
I appreciate it thank you for the additional comments.
Our next question comes from Phil Winslow with Wells Fargo.
Alright, Thanks for taking my question on and congrats on a strong quarter.
Wanted to focus on and on the license line was up 4% as reported would be a flat constant currency off of what was actually the toughest comp for this fiscal year.
You're right some contact and sort of what is driving that particularly sort of relative to the strength and youre also seeing and the cloud side is this the Oracle database and just to be add on to the Oracle database.
And we're more color there and then also in particular, you sort of and in conjunction with the cloud that would be great.
Sure let me take App. So the Oracle database remains very strong and what's good about the Oracle database and you can also bring your own license to the cloud. So it's both on premise and in the cloud can be used there and it remains very very strong.
The installed base of the Oracle database.
Can use to grow and.
And.
And that is of course, our central piece now in addition, Java on premise continues to do very well as more and more.
Companies continue to invest and Java and trust Java for their own applications and in addition, our vertical applications and some of our industry applications.
And require on premise license for the customers use and we also have cloud services and many of these verticals, but especially and telecommunications as many of.
Communications companies move to five G. We are on very central part.
From there their transition to <unk> and need our license in that are in those areas. So.
Database.
Top doing incredibly well.
Java, and doing very very well and our vertical applications and then pretty much everything else of course as you know is.
Offered Jeff in the cloud.
Perfect. Thanks, very much for the color I appreciate it.
Our final question comes from Brad Zelnick with credit Suisse.
Great. Thank you so much for taking the question and congrats as well on a great quarter Larry.
So great to hear every single one of those S&P wins, especially since investors think of sap's customer relationships and being so deep so clearly by displacing them and so many accounts. It speaks volumes to the quality of your product and trust that these companies placed with Oracle and so my question is this why now and why from a product.
Perspective, you mentioned Gardner's take but since Oracle and as always competed on having better products and what have you been doing product wise. That's enabled you to pull ahead of them like this and what do you need to continue to do product wise.
To remain ahead.
So.
Well, we started 10 years ago to build fusion financials for the cloud to rewrite.
We have people who have people thought the ERP JD Edwards ERP and of course Oracle E business suite. We had these three separate the on premise ERP systems and because.
And we decided to re a decade ago to rewrite all of that for the cloud.
And.
And the.
Unbelievably.
They just.
And we did a very good job, we started a decade ago.
And we did I did I think.
Very good job redoing, its a big job to say, the least redoing our ERP products forward.
<unk> for the cloud.
That said.
GAAP chose not to rewrite.
Their ERP products instead, they made a bunch of acquisitions.
They bought concur and they bought our Rebbe, they bought success factors, but they never.
And we made some acquisitions also by the way both to lay on it right now on the other the other thing.
We wrote everything for the cloud.
Instead re embedded in their own database called China and folks focused on this new database.
And never really rewrote their ERP code for the cloud I mean, its just an unbelievable error. They worked on a new database.
And the thing we're competing with so called as for Hana and the cloud SAP because it is.
And is not a cloud product at all.
It is the 35 year old Abe App. This is written and a programming language called <unk> Oracle fusion written entirely and Java.
And it's been entirely rewritten over little over the last decade, SAP stuff and literally 30 years old the same same stuff and <unk> always had.
That day now we'll host for you.
So I would say we did have a competent job rewriting for the cloud just entirely missed the boat so it.
It really is more responsible for our leadership position than we are.
Yeah.
And the.
And again, they never rewrote their obligation for the cloud, it's unbelievable whats happened and our customers are noticing.
We offer a new and a new release of our ERP system. Every 90 days, we offer new features and functions and that's how the cloud works you are on the cloud you debt that you get new features and functions you on with 90 day guidance. We give you more features and more capabilities every 90 days.
SAP has nothing like that.
It's not a cloud systems it simply is okay.
You can get you can get to SAP four Hana and you can get and hosted by somebody but they don't even have a cloud.
They never built the cloud.
That's what happened.
Thank you, Matt it's amazing.
Okay.
Thank you Larry.
A telephonic replay of this conference call will be available for the next 24 hours day.
And information can be found on the press release issued earlier today. Please call the Investor Relations Department with any follow up questions from this call and we look forward to speaking with you. Thank you for joining us today and with that I'll turn the call back to Erica for closing.
Thank you for joining today's Oracle's third quarter 2021 earnings conference call and we appreciate your participation you may now disconnect.
Okay.
Okay.
And.
And.
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