Oracle Corp. plans to unveil the first new version of itsflagship database program in five years and an expanded line ofhigh-end servers, as the software maker steps up its effort to winmore cloud-computing business.

At its OpenWorld conference in San Francisco on Sept. 30, ChiefExecutive Officer Larry Ellison will show the new 12c database,designed for cloud computing, and more powerful systems to handleballooning amounts of corporate data more efficiently, Mark Hurd,co-president at Oracle, said in an interview yesterday.

Oracle has doubled sales in the past five years and boostedannual profit by gobbling up business-software companies tochallenge SAP AG while also selling customers its database, whichaccounted for about 48 percent of sales in the latest fiscal year.At OpenWorld, Oracle will seek to show there's an alternative pathto cloud computing — where programs are stored and managed remotely— than the no-hardware approach espoused by rivals such asSalesforce.com Inc. and Workday Inc.

“This will be an important week for them coming up, to declarethey're in the cloud,” said Rick Sherlund, an analyst at NomuraHoldings Inc., who recommends buying Oracle shares. “Larry'sgetting with the program in a big way.”

The 12c database will let Oracle serve multiple companies'data-processing needs from the same information storehouse and willarrive by early next year, Ellison told analysts on a Sept. 20conference call. The company's Exadata and Exalogic systems, plusits database, Java development tools and social media-analysissoftware, can be delivered to businesses as a service Oraclemanages over the Internet, Hurd said.

“We'll be giving you a cloud with the Exadata infrastructure,”Hurd said in the interview at the company's Redwood City,California, headquarters. “You have the ability to change theeconomics dramatically.”

As International Business Machines Corp., Microsoft Corp. andVMware Inc. also shift toward selling products aimed at lettingcompanies manage more of their systems and software as a service,it's important that Oracle adapt as well. The new 12c database —the c stands for “cloud” — includes the ability that lets thesoftware handle multiple jobs using “virtualization” technology, anadvantage in cloud computing.

It has been five years since the company introduced a newversion of the database, and Oracle is pitching its customers onthe benefit of being able to move their computing jobs from theirdata centers to the cloud if the need arises, Hurd said.

Private Clouds

Oracle can remotely manage customers' applications, databasesoftware, and server computers in so-called private clouds sittinginside companies' own data centers to increase the peace of mind ofchief information officers, said Sherlund, who is based in NewYork. Customers would get the benefit of Oracle's package oftechnology without having to perform the installation andmaintenance themselves.

Oracle is relying on the new products to help reverse a slowdownin growth and a stock price that has underperformed those of itsrivals. Sales declined 2.3 percent in the fiscal first quarter,which ended Aug. 31, dragged down by a drop in the hardwarebusiness acquired from Sun Microsystems in 2010. New softwarelicense sales, a measure of freshly signed business, tapered to 5.1percent growth from more than 16 percent a year earlier.

Oracle's stock has risen 22 percent this year, compared withgains of 35 percent for SAP, and a 51 percent climb for shares ofSalesforce.com.

Oracle has expanded sales and profit through its acquisitionstrategy. The company has spent more than $50 billion on more than80 deals to add business programs that mostly run on servers andpersonal computers.

Still, it may be harder to grow through acquisitions in cloudcomputing, because those companies sell by subscription and don'thave steady streams of maintenance revenue that Oracle canimmediately add, said Pat Walravens, an analyst at JMP SecuritiesLLC.

“Cloud companies don't lend themselves well to a rollupstrategy,” said Walravens, who has a market perform rating onOracle shares. “You just don't get the same efficiencies.”

Software-as-a-service providers also tend to trade at highermultiples of sales than the businesses Oracle has traditionallybought, making deals relatively more expensive, said JohnO'Farrell, a partner at venture capital firm Andreessen Horowitz.Bloomberg LP, the parent of Bloomberg News, is an investor inAndreessen Horowitz.

'Savvy Company'

Oracle has said it has signed $1 billion of cloud-computingbusiness, including from its Oracle Cloud service, which includesFusion human-resources and customer-relations applications as wellas online programs from acquired companies Taleo and RightNowTechnologies. The company will give an updated figure at a meetingwith analysts on Oct. 4, Hurd said.

By contrast, Salesforce in its last quarterly report boasted a$4.1 billion backlog of signed contracts. Workday, which ispreparing for an initial public offering, has also been winningdeals for its online human resources and financial software,including an HR system for tens of thousands of Google Inc.employees.

“Oracle's a savvy company — they always figure out how to comefrom behind,” said Brent Thill, an analyst at UBS AG in SanFrancisco, who recommends buying the shares. “But they're waybehind in the cloud.”

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