Oracle CEO Larry Ellison predicts database consolidation, a promised in-memory option, and occasional-end engineered systems will accelerate growth in 2014.

Oracle reported better-than-expected financial results for the newest quarter, and in a conference call with financial analysts Wednesday, CEO Larry Ellison predicted that its flagship 12c Database, a growing portfolio of engineered systems, and cloud software subscriptions will drive growth within the year ahead.

Results for the fiscal second quarter of 2014, which ended Nov. 30, were highlighted by a 2% revenue increase from a year earlier to $9.3 billion and earnings of 69 cents per share. Wall Street were expecting $9.2 billion of revenue and income of 67 cents per share. The gains came against a sturdy prior-year quarter, and sales were flat overall. New software licenses and cloud software subscriptions revenue was unchanged at $2.4 billion. Hardware systems revenue, including gross sales and support, was unchanged at $1.3 billion.

Looking ahead, Ellison and Oracle president Mark Hurd said sales of the 12c database, introduced this summer, have only just begun to kick in. That database’s multi-tenancy support will entice cloud vendors, however the feature will even support database consolidation among Oracle’s bread-and-butter enterprise customers, they predicted.

“Most of our big customers have found tens of the way to configure Oracle 8, 9, 10, and 11, they usually have multiple operating systems and multiple hardware platforms, so there’s a chance to simplify and standardize those environments,” Hurd told analysts.

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The idea of deploying 12c on Exadata, Oracle’s leading so-called engineered system, is to regulate and maintain many database instances centrally on a single appliance. “Our customers lay our a fortune managing tens, hundreds, thousands of various Oracle environments and versions, and so they should patch them, upgrade them, and back them up,” Ellison said. “We are able to simplify that and make that a more reliable and cheaper process through the use of the multi-tenant option on top of Exadata.”

Ellison also touted a 12c In-Memory Option that was pre-announced at Oracle Open World and not using a roadmap or release dates. This is a competitive response to SAP’s Hana platform and Microsoft SQL Server 2014. The latter includes an In-Memory OLTP feature and is about for release inside the first half 2014.

Ellison offered the primary real insight into the discharge date. “People will start fooling around with it inside the second half, and as we get around to this time next year, we’ll see good growth being driven by the in-memory option.”

Hardware sales continued a now years-long slide by dropping 3% within the quarter, but Ellison said the sales shift far from low-margin, commodity servers is “kind of completed.” Higher-margin engineered systems now account for about 30% of hardware sales.

Looking beyond Exadata and Exalogic, Ellison said smaller engineered systems, including the low-cost Oracle Database Appliance (ODA) and a brand new Oracle Virtual Compute Appliance, will drive growth in 2014. “These lower-cost engineered systems go after the mass and value-sensitive parts of the market. We think to sell loads of engineered systems with an entire suite of machines, not only the well-known high-end Exadata machines.”

The Virtual Compute Appliance combines low-cost commodity servers running Linux with open-source Xen-based virtualization software and is “very aggressively priced,” in line with Ellison. The Oracle Database Appliance is $60,000 for the hardware, versus $200,000 for a 1/8 rack Exadata. What’s more, Exadata requires storage-management software that costs an extra $180,000. ODA starts with 18 terabytes of disk storage and an 18-TB storage expansion shelf, bringing total capacity as much as 36 TB.

On the cloud computing front, the corporate reported that Oracle Fusion subscriptions increased 35% inside the quarter, and Hurd and Ellison detailed efforts to challenge both Workday and Salesforce.com. Hurd said the cloud business has “hyper-growth-like” characteristics, and he noted mobile, social, and analytics capabilities built into the cloud apps. “We expect these are core differentiations specifically versus Workday.”

Breaking with the IT-centric selling of the past, Ellison said that Oracle sales teams increasingly engage with line-of-business executives and go face to face with “a brand new generation of functional specialists” inside the cloud.

“some time ago, we decided we needed to line up an HCM salesforce directly against Workday, and all they give thught to each day is competing for each Workday prospect,” Ellison said. “We have got another team that competes against Salesforce in sales force automation, and other teams that compete against Salesforce in service automation and customer experience.”

The numbers in Oracle’s SEC filings of late have reflected anything but hyper growth, so anything even approaching double-digit gains in 2014 will be a remarkable achievement. Oracle co-president and CFO Safra Catz projected third-quarter growth of between 2% and 12% for software and subscription revenue and between 1% and 9% for the hardware division. Somewhere in the midst of those ranges lies a pragmatic expectation.

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