Acquisition spree boosts Oracle

New software sales is a key indicator of future growth

US software giant Oracle posted higher profits for the last three months on the back of new business products gained from takeovers.

The firm's net income for the three months to end of May was up 23% from a year earlier to $1.6bn (£800m).

Earnings were supported by an increase in new software license sales, which were up 17% to $2.5bn - a key indicator of future success.

Oracle has been gaining on rival SAP, the market leader in business software.

Land grab

"Over the last twelve months Oracle's application new software license revenues grew at a rate of 32% while SAP's growth slowed to 10% in their most recent fiscal year," said Oracle president Charles Phillips.

"Our strategy of combining innovation with acquisitions is clearly beating SAP's strategy of trying to build everything themselves using a 1970s-era proprietary programming language."

The company has filed a lawsuit against SAP, accusing of it hacking into its computer network and stealing key information.

Over the past three years, Oracle has spent about $25bn (£12.6bn) snapping up a string of software makers, such as Hyperion Solutions and Stellent, that make programmes designed to improve business efficiency.

This has boosted Oracle's product range, enabling its management to give an upbeat outlook for sales over the coming quarter.

Shares of the Nasdaq-listed firm, which also said it had gained market share from database leader IBM, added 1% to its closing price of $19.16 after trading in New York had closed, indicating they will rise further on Wednesday.