All right, I think we're ready to go here. Good morning, ladies and gentlemen. I'm Jeff Henley, Vice Chairman of the Board of Directors, and it's my pleasure to welcome you. In accordance with the notice of the meeting, I call to order the 40th annual meeting of stockholders of Oracle Corporation. Each stockholder was given an agenda for today's meeting. We will first conduct the formal portion of the stockholders meeting in accordance with this agenda. Following adjournment of the formal portion, there will be an opportunity for questions and discussion. Before proceeding to the business of the meeting, I would like to make introductions. First, let me introduce myself and the other directors who are standing for election. As I mentioned, my name is Jeff Henley. I've been a director since 1995 and Vice Chairman since 2014. Previous to that, I served as Chairman.
I was also previously Oracle's Chief Financial Officer from 1991 to 2004. Larry Ellison was appointed Chairman of the Board and Chief Technology Officer in 2014. Previously, Mr. Ellison was our CEO and has been a director since he founded Oracle in 1977. Safra Catz has been a director since 2001 and was appointed CEO of Oracle in 2014. Prior to that, Ms. Catz served as President and Chief Financial Officer. Mark Hurd has been a director since 2010, was appointed CEO of Oracle in 2014. Previously, Mr. Hurd served as President of Oracle, and before joining Oracle, he was the Chairman CEO of Hewlett-Packard Company. Dr. Michael Boskin has been a director since 1994. Dr. Boskin is the Tully M. Friedman Professor of Economics, and Hoover Institution Senior Fellow at Stanford University. Jeff Berg has been a director since 1997.
He is chairman of Northside Services, LLC, a talent and literary agency. Mr. Berg was formerly Chairman and CEO of International Creative Management, Inc. Hector Garcia-Molina has been a director since 2001. He is the Leonard Bosack and Sandra Lerner Professor in departments of Computer Science and Electrical Engineering at Stanford University. Naomi Seligman has been a director since 2005. She's a senior partner at Ostriker vo n Simpson, a technology research firm that chairs the CIO Strategy Exchange. George Conrades has been a director since 2008. He is chairman of Akamai Technologies and previously served as Akamai's CEO. Bruce Chizen has been a director since 2008. He is an independent consultant and serves as senior adviser to Permira Advisers and a venture partner at Voyager Capital. He previously served as CEO of Adobe Systems Incorporated. Secretary Leon Panetta has been a director since 2015.
Secretary Panetta previously served as the U.S. Secretary of Defense and Director of the Central Intelligence Agency. He is the Co-founder and Chairman of the Panetta Institute for Public Policy. Renée James has been a director since 2015. She's the CEO of a newly formed company focused on data center server processors, and she is an operating executive at The Carlyle Group. She recently concluded a 28-year career with Intel Corporation, where she most recently served as President. Seated next to me is Dorian Daley, Oracle's General Counsel and Secretary. Also present today are Kevin Asher, Trish Enger, and Andrew Cavan from Ernst & Young LLP, our independent registered public accounting firm. Prior to this meeting, we asked if E&Y wished to make any statements at today's meeting.
E&Y indicated that while they will not make a formal presentation, they would be glad to respond to any questions during the question-and-answer period. Finally, we are assisted today by Chris Hall, a representative of American Stock Transfer & Trust Company, LLC, our inspector of elections in the tabulation of proxies and ballots. The minutes of last year's annual meeting are available, and any stockholder wishing to inspect the minutes should contact our corporate secretary. Now let's move to the formal portion of the meeting. Dorian Daley will report on the mailing of the notice of this meeting.
Thank you. This meeting is held pursuant to a notice dated September 28, 2017. On or about September 28, 2017, each stockholder of record, as of the close of business on September 18, 2017, was sent either a notification of internet availability of proxy materials or the notice itself. All documents concerning notice of the meeting will be filed with the records of the meeting, and proof of mailing and the list of stockholders entitled to vote are both available for inspection by any stockholder.
Dorian will now advise whether a quorum is present at the meeting and canvass the stockholders present. Those stockholders who have returned proxies have authorized the persons identified in the proxies to vote on the proposals coming before the meeting.
On the record date, there were 4,173,486,289 shares of Oracle's common stock issued, outstanding, and entitled to vote at this meeting. A majority of these shares is present in person or by proxy, and therefore, a quorum necessary to transact business is present. If you have a proxy to be voted at this meeting that has not been delivered to the Inspector of Elections, you should register your name with the monitors and show them the proxy. If you have submitted a proxy but now wish to withdraw the proxy and submit a new proxy or vote in person, you should register with the monitors if you have not already done so. If you have not submitted a proxy and you wish to vote in person, you should now register with the monitors if you have not already done so. The polls are now open.
Please raise your hand if you need to register your name with the monitors or if you require any assistance with your ballot or your proxy. The polls will close.
I'm sorry, Joanne. Could someone turn these lights down? Someone's got these lights blasting at us, and all you can do is look straight down. Further down.
Way down.
I know. There are three that are Okay. There's one right in the middle that. Terrible lighting. Oh, still terrible. Okay.
The polls will close at the conclusion of the formal portion of the meeting. Please register with the monitors and hand in your ballot or proxy prior to the end of the formal portion of this meeting.
Okay, thank you. I hereby declare a quorum is present at this meeting. On behalf of Oracle's board, I would like to express my appreciation to all stockholders who returned their proxies or submitted ballots. There are eight items of business on the agenda for this year's meeting, five management proposals and three stockholder proposals. All voting results announced today are preliminary. Final vote totals for each of the proposals voted upon today will be made publicly available within the next few days. The first is the election of directors. We will start with this first of the management proposals. The first matter of business is the election of the 12 directors to serve until the next annual meeting of stockholders.
The nominees recommended by the board of directors are Lawrence Ellison, Jeff Henley, Safra Catz, Mark Hurd, Michael Boskin, Jeffrey Berg, Hector Garcia-Molina, Naomi Seligman, George Conrades, Bruce Chizen, Leon Panetta, and Renée James. Additional information about each of the nominees can be found on pages seven through 10 of Oracle's proxy statement. Will the secretary now announce the results of the vote?
Each nominee for election to the board of directors has received the affirmative vote of a majority of Oracle's outstanding shares of common stock present and entitled to vote at this meeting.
I hereby declare that all the nominees for director have been duly elected. The next item of business is the non-binding advisory vote by stockholders on the compensation paid to Oracle's named executive officers, as disclosed in Oracle's proxy statement filed in connection with this meeting. This is commonly referred to as say-on-pay vote. Will the secretary please indicate the results of the voting?
Based on preliminary voting results, we believe that this proposal did not receive the affirmative vote of a majority of Oracle's outstanding shares of common stock present and entitled to vote at this meeting.
Thank you. The non-binding advisory vote on Oracle's compensation program for executive officers is hereby noted. The next item of business is the
The frequency.
Advisory was the frequency. There's two say on pay. Thought I had the same page again. The next item of business is the non-binding advisory vote by stockholders on the frequency of future say-on-pay votes. Stockholders were given the option of selecting a frequency of one year, two years, three years, or abstaining. The Board of Directors recommended a frequency of one year. Will the secretary please indicate the results of the voting?
A majority of Oracle's outstanding shares of common stock present and entitled to vote at this meeting voted for a frequency of one year.
Thank you. The non-binding advisory vote on the frequency of future say-on-pay votes is hereby noted. The next item of business is the approval of the amendment and restatement of the Oracle Corporation Amended and Restated 2000 Long-Term Equity Incentive Plan. The material terms of the plan are described in our proxy statement. The Board of Directors has recommended that stockholders approve the plan. Will the secretary now announce the results of the vote?
This proposal received the affirmative vote of a majority of Oracle's outstanding shares of common stock present and entitled to vote at this meeting.
I hereby declare that the amendment and restatement of the Oracle Corporation Amended and Restated 2000 Long-Term Equity Incentive Plan has been approved and adopted. The next matter is the ratification of the appointment of Ernst & Young LLP as Oracle's independent registered public accounting firm by the Finance and Audit Committee of the Oracle Board of Directors. The Board of Directors recommends the ratification of the appointment of Ernst & Young as our independent registered public accounting firm for fiscal year 2018. Will the secretary now announce the results of the vote?
This proposal received the affirmative vote of a majority of Oracle's outstanding shares of common stock present and entitled to vote at this meeting.
The appointment of Ernst & Young as Oracle's independent registered public accounting firm for fiscal year 2018 has been duly ratified. The next item of business relates to the first of these several stockholder proposals. It is a proposal submitted by the New York State Common Retirement Fund, a stockholder of Oracle. The proposal, which appears on page 69 of Oracle's proxy statement Request that the company provide a public report disclosing certain information regarding political contributions. We understand that Heather Smith will represent the New York State Common Retirement Fund at this meeting. Is Heather Smith present? Okay. Pursuant to the rules of conduct for the meeting, you will have up to five minutes to present the proposal and move for its adoption.
Great. Thank you, Mr. Vice Chairman. Once again, my name is Heather Smith, and I am here today on behalf of the New York State Common Retirement Fund to present the fund's resolution calling on Oracle to fully report on its political spending and its process and procedures for making political contributions with corporate funds. As long-term shareholders of Oracle, the fund supports policies that apply transparency and accountability to corporate political giving. In its view, such disclosure is fully consistent with public policy in regard to public company disclosures. Company executives exercise wide discretion over the use of corporate resources for political purposes, and relying only on the limited data available from the Federal Election Commission and the Internal Revenue Service can give shareholders an incomplete picture of the company's political spending.
The New York State Fund believes that a complete disclosure by the company is necessary for shareholders to be able to fully evaluate the political use of corporate assets. Therefore, on behalf of the New York State Common Retirement Fund, holder of 10,104,257 Oracle shares, I submit the resolution on political disclosure found in your proxy materials. Thank you.
Okay, thank you. The Board opposes the adoption of this proposal for the reasons described on page 70 of Oracle's proxy statement. Will the Secretary now announce the results of the vote?
This stockholder proposal was defeated by a majority of Oracle's outstanding shares of common stock present and entitled to vote at this meeting.
Okay, I hereby declare that the stockholder proposal regarding a political contributions report has been defeated. The next item of business is the proposal submitted by Pax World Funds, a stockholder of Oracle. The proposal, which appears on page 71 of Oracle's proxy statement, requests that the company provide a report disclosing certain information regarding pay equity. We understand that Heather Smith will also represent Pax World Funds at this meeting. Pursuant again to the rules of conduct for the meeting, you will have up to five minutes to present the proposal and move for its adoption.
Great. Thank you again. I am here today to present proposal number seven on behalf of Pax World Mutual Funds, a leader in the field of sustainable investing. Pax World's proposal requests that Oracle issue a report identifying whether a gender pay gap exists among its employees, and if so, outline the steps being taken to reduce the gap. Oracle does not provide any public reporting on gender pay equity. We believe that pay equity is a key issue for technology companies and is particularly relevant at Oracle given recent lawsuits concerning the company's pay practices. There is a longstanding gender and racial pay gap in the U.S., and a 2016 Glassdoor study found an unexplained gender pay gap for women in the information technology industry of 5.9%.
Mercer reports that women continue to be significantly underrepresented in the technology sector, and that representation falls as they move through the pipeline. Oracle's current workforce composition reflects this, as women comprise 29% of the company's employees, but just 23% of its leadership. Ensuring equal pay for equal work is one way to help address this gap. Research has found that active management of pay equity is a crucial driver of gender diversity in organizations. Greater gender diversity has been correlated with improved company financial performance, increased innovation, better problem-solving, stimulated group performance, and enhanced company reputation. Conversely, studies also show that pay inequity can impair management collaboration, particularly at technologically intensive companies. By failing to comprehensively address pay equity issues, Oracle may be placing itself at a competitive disadvantage when it comes to talent recruitment, retention, and employee productivity.
Other technology companies have already published information on their gender pay equity practices and performance, including Apple, Amazon, Cisco Systems, eBay, Intel, Microsoft, Salesforce, and SAP, among others. Beyond Oracle's peers, non-discrimination in pay practices is a widely accepted principle. A 2017 survey by JUST Capital found that 71% of Americans believe companies should not discriminate in their pay practices. In its opposition statement, Oracle outlines its diversity and inclusion efforts, which Pax World commends, but it does not provide specific metrics, policies, or goals with respect to the gender pay gap. As an S&P 100 company with 138,000 employees worldwide, we believe that Oracle can and should do more. For these reasons, we believe that both Oracle and its stakeholders would be well-served by greater transparency around its pay equity policies and practices.
Doing so would assure investors that Oracle is proactively managing this issue as part of its overall diversity and inclusion strategy, position the company to achieve greater diversity, and reduce regulatory and reputational risks. Thank you for the opportunity to present this proposal.
Okay, thank you. The board opposes the adoption of this proposal for the reasons described on page 72 of Oracle's proxy statement. Will the Secretary now announce the results of the vote?
This stockholder proposal was defeated by a majority of Oracle's outstanding shares of common stock present and entitled to vote at this meeting.
I hereby declare that the stockholder proposal regarding a pay equity report has been defeated. The next item of business is the proposal submitted by Kenneth Steiner, a stockholder of Oracle. The proposal, which appears on page 73 of Oracle's proxy statement, requests that the board make certain amendments to Oracle's proxy access bylaw. We understand that Jing Zhao will represent Kenneth Steiner at this meeting. Is Jing Zhao present?
Good morning.
Can I just remind you, pursuant to the rules of conduct for the meeting, you have up to five minutes to present the proposal and move for its adoption.
Thank you very much. This proposal is sponsored by Kenneth Steiner at Great Neck in New York. Resort shareholders ask the board of directors to amend its proxy access bylaws, primarily found in Section 1.12 of our bylaws and any other associated bylaw sections and other documents to include the following changes, for the purpose of decreasing the average amount of company common stock. The average member of a nominating group would have to hold for three years to satisfy the aggregate ownership requirement to form a nominating group and increasing the potential nominees. One, no limitations shall be placed on the number of stockholders that can aggregate their common shares to achieve the 3% required shares to become an eligible stockholder to nominate a proxy access nominee or nominees.
Two, the number of proxy access nominees eligible to appear in proxy material shall be one quarter of the directors then serving or two, whichever is greater. Even if the 20 largest public pension funds were able to aggregate their shares, they would not meet the 3% criteria for continuous three years at most companies examined by the Council of Institutional Investors. Additionally, many of the largest investors of major companies are routinely passive investors who would be unlikely to be part of the proxy access shareholders aggregation process. Our current limit of 20 shareholders also excludes most retail shareholders from having any lure. Shareholders can benefit from a more meaningful number of director positions available for proxy access via this proposal. These features, where combined, give shareholders a more meaningful shareholder proxy access structure. Of course, this proposal cannot address all the shortcomings in our corporate governance.
However, recent shortcomings should at least be an added incentive to vote in favor of this one step forward. Examples of corporate governance shortcomings include this information published in 2016, seven directors over age 70, six directors with over 15 years long-term, two directors with a negative vote higher than 40%, George Conrades and Naomi Seligman, plus four inside directors. Return to the core topics of this proposal. Please vote to increase shareholder participation. Please vote shareholder proxy access reform. Thank you very much.
Okay. Thank you. The board opposes adoption of this proposal for reasons described on pages 74 through 75 of Oracle's proxy statement. Will the secretary now announce the results of the vote?
This stockholder proposal was defeated by a majority of Oracle's outstanding shares of common stock present and entitled to vote at this meeting.
I hereby declare that the stockholder proposal regarding a proxy access bylaw amendment has been defeated. This concludes the formal part of the meeting. I hereby declare that the formal part of the annual meeting is adjourned, and the polls are now closed. We are now at the part of the meeting providing for general questions and discussion. Anyone wishing to address the meeting should raise your hand for recognition. Please state your name and indicate whether you are a stockholder or a proxy for a stockholder and proceed with your question. Please limit your questions or comments to two minutes. We will answer as many questions as possible until we run out of time. Please note that our answers to stockholder questions may include expectations, predictions, estimates, or other information that might be considered forward-looking.
While these forward-looking statements represent our current judgment on the future, they're subject to risks and uncertainties that could cause actual results to differ materially. You should review our most recent Form 10-K and Form 10-Q for a discussion of risks that may affect our future results or the market price of our stock. You're cautioned not to place undue reliance on forward-looking statements, which reflect our opinions only as of today. Please keep in mind that we're not obligating ourselves to update these forward-looking statements in light of new information or future events. I'll now turn the mic over to our Chairman and Chief Technology Officer, Larry Ellison.
Gentleman over here.
Oh.
My name is Anthony Fisher. I'm a stockholder. I have a question of Mr. Ellison. Can you tell us Let's say three significant areas that Oracle is involved in as far as generating revenue. What do you project for each of those three significant areas as far as growth going in the future? The last question is, how are you doing in competition against Amazon?
Our three biggest areas in business are our technology business, where we deliver primarily a database. We deliver that database on-premise, where you can run it in a data center that you own, or we can deliver that database in the public cloud, where we compete with Amazon. We also sell applications. We sell applications on-premise, though that business is actually getting smaller because our application business where we deliver the applications in the public cloud is growing very rapidly and really subsuming, taking over our application business. We started our transition from on-premise to cloud applications some time ago, right now our cloud application business is much bigger than our on-premise application business. That is not true of our technology business.
Our technology business on-premise is still larger, we have aggressively begun to transition to the cloud, where we compete with Amazon with a new product called the Oracle Autonomous Database. The Oracle Autonomous Database, which we demonstrated at Oracle OpenWorld a short while ago, we showed there where that runs approximately in a data warehousing application, approximately 15 times faster than Amazon's similar offering called Amazon Redshift. If you want to run that Amazon Redshift database, not only do you run 15 times slower, you have to pay 10 times more. We think we are years ahead of Amazon in terms of database technology, our challenge is to move that database franchise from simply an on-premise business to a combination of on-premise and cloud business. We think we have a big technology advantage over Amazon in that area.
We have all the associated, the third business or all the associated services. We're in the hardware business. We're in the consulting business. We're in a variety of other businesses. Our two primary businesses are selling applications, selling technology, database technology. We sell them both on-premise and in the cloud. We expect the bulk of our business going forward and the bulk of our growth will be driven by our public cloud business.
What type of % increase do you feel in those three areas going forward in the near term that you're hoping for?
Well, our applications business has been growing. Our SaaS applications business has been growing in excess of 50%. It's been growing very rapidly. Our overall application business, the combination of on-premise and cloud application business, has been growing in double digits. That business is extremely healthy, taken in the aggregate on-premise and in the cloud. The cloud business, which is the primary driver, is growing again in excess of 50%. You're going to see our overall applications growth rate actually increase. Our applications growth rate will increase while we scale the business, which is very unusual. In technology, these are early days of us moving our technology franchise from on-premise and into the cloud. We don't expect that our technology business on-premise will decline. We think that will be flattish, but we think we're going to have very rapid growth in technology in the cloud.
There are some other businesses that are somewhat smaller. Our consulting business is now growing, being driven by demand in the cloud, while our hardware business is declining because people are spending less money buying hardware and installing it in their data center. Instead, they're choosing to move to the cloud and rent the hardware in the cloud rather than purchase it for their own data center. Our hardware business, we expect to continue to decline, albeit more slowly. Our consulting business is increasing, being driven by the cloud. I've already commented on our two primary technology businesses, applications, and database.
Thank you.
My name is Daniel. I'm a stockholder. I have two questions. The first one, is the cloud computing business cannibalizing the legacy business?
Actually, I have to answer separately for the applications business and the technology business. In the applications business, we built all new applications for the cloud. We completely rewrote our applications ground up for the cloud. We've been encouraging people to move from what we used to call the Oracle E-Business Suite, our on-premise suite of applications, to something called our Oracle Fusion Cloud Applications Suite, our cloud suite. That really is a migration from an older technology to a more modern technology. It's not simply moving from your data center into the cloud. It's a whole new suite of more modern applications. There, it is cannibalizing our business, we intended for it to cannibalize our business. The good news is, we get approximately three times more from a customer who's using our cloud system than an on-premise system.
There's more revenue associated with the cloud business, there's more profit associated with the cloud business because we're providing much more benefit to the customer. We're providing, again, the computers and the network and the power and the data center and the services and all of these other things, not just giving them a piece of software to run. That cannibalization is actually part of the plan, it's going very well. In the technology business, there is no cannibalization because what you do is you continue to buy software licenses, you can then choose to run those software licenses either in your data center or in the cloud. We continue to sell those software licenses, if you choose to run those database licenses in our cloud, that's a new business for us.
We're not trying to cannibalize our technology business because the database that you run on-premise is pretty much identical to the database that you run in the cloud. It's a matter of simply running the things in your data center that make sense to run in your data center, running the things in the public cloud that are more efficiently and economically run in the public cloud. You balance that out. We continue to sell software licenses, and we sell cloud services together. No cannibalization intended, nor is any occurring.
My second question is, in The Wall Street Journal, I frequently see ads for CRM where Oracle is a distant second to Salesforce, I was wondering what could be done to narrow the gap.
Well, we're in a lot of different businesses. They're in the CRM business. We're in the database business. We're in the ERP business. We're in the HCM business. Let me encourage you to look at a different ad, which prompted the Salesforce ad, where we showed that we sell more cloud applications every year than Salesforce does. In fact, we're selling about twice as many. If you look at last year, we sold about twice as much revenue for cloud, just applications, forget database, forget the other stuff, just cloud applications, SaaS applications. We sold about twice as much as Salesforce did. We are the largest provider of applications in the cloud on the planet Earth. Now, Salesforce would like to ask a slightly different question.
Well, if you don't count Oracle's ERP, and if you don't count Oracle's HCM or all this other stuff, or clinical trials, all this other stuff Oracle has, but if you just narrow in on one application, sales automation, look how much better we're doing than they are. That's the Salesforce ad. That's part of the answer. We're already bigger in applications than they are, but not in that specific application. Having said that, we are aggressively moving and competing with Salesforce. We are their number one competitor in sales automation. We've recently converted a couple of big Salesforce customers where they've thrown out Salesforce and put in Oracle Sales instead. Again, these are the early days, but our intention is to compete aggressively with Salesforce in their strongest market, and we're seeing some success. We're their number one competitor.
Probably a combination of Oracle and Microsoft are their two primary competitors in sales automation, to be fair. Microsoft also has a strong offering there. Microsoft's more in the low end of the market. We're more in the high end of the Salesforce automation market. Our intention is to continue to improve our product, to compete aggressively in that space against their strongest product, which is sales automation, we're seeing some success already, we'll continue to compete this year and next year and the year after.
Jim Trezeseu, shareholder. Given Oracle's move to the cloud, what my concerns are with cybersecurity attacks being what they are, is this going to be a safe place to do business? What Oracle is going to do to mitigate that, if any government help is required to help industry?
I think that's a great question, cybersecurity is going to become a bigger and bigger issue. The good news for Oracle is we have been sensitive to this issue from day one. Oracle's first customer, I guess it is no big secret, was the Central Intelligence Agency. Oracle's second customer was the Defense Intelligence Agency. Oracle's third customer was the National Security Agency, even though that agency didn't really exist at the time. You couldn't use the name. We paid a lot of attention to security and always built our database products and our other products with security being a very important consideration in everything we do. I mentioned earlier, we just announced the Oracle Autonomous Database at Oracle OpenWorld, I mentioned that it's one-tenth the cost of Amazon and runs 15 times faster.
Maybe more importantly, this database, when it detects a vulnerability, automatically fixes itself with no human intervention. One of the big problems with cyberattacks is, one, you have to detect the attack, once the attack's been detected and vulnerability has been detected, you have to patch the systems that are vulnerable. You have to repair them. One of the great things about the Oracle Autonomous Database is once a vulnerability is detected, the system automatically fixes itself, immediately fixes itself without any human intervention. No one else has anything like that. Amazon has nothing remotely like that, nor does Microsoft, nor does IBM or anybody else. We take security very seriously. We think it's a competitive advantage.
We think, for example, putting your data in an Oracle Cloud, for most customers, maybe not every customer, for most customers, putting your data in an Oracle Cloud is much safer from cyberattacks than putting it in your own data center. There are a few exceptions in the intelligence community where that's not true because they simply keep their data off the public internet, period. That's pretty safe. You keep it in a vault. In most cases, we do a better job of detecting threats and remediating threats than most government agencies and most commercial entities. We think as this threat becomes more real, this threat becomes more important, that's another very good reason for picking Oracle over Amazon or Microsoft or anybody else.
Hi, my name is Bruce Whitson. I'm a stockholder. I'd be interested in knowing your successes in the vertical markets and how things are going. You'd mentioned the government as being certainly the origin of Oracle. How is that, as a vertical, performing today? Is there any aspects of that can use the software as a service, or are they still on-premise primarily? Other verticals, be interested to know what your success rates in those verticals are.
Probably the best person to address the verticals is Mark Hurd, and maybe Safra can talk about the government verticals.
Sure. The biggest vertical in IT is financial services, so it's the broadest vertical in the world. Historically, one of our competitors, IBM, in fact, I think IBM at one point, probably 30% of their business was just in financial services. The last couple of years, we've taken over the leading market share position in many of the big banks, just in this country as an example. This year in one of the big four banks, we became their biggest supplier. We're actually really close in two of the others to becoming their biggest supplier as well. Great success in financial services. Oracle has historically had a very strong position in retail, for example, which is about the third biggest industry. Telecommunications would be the second.
Those three industries outside of government, which Safra will talk about, the three biggest industries and frankly, our three strongest positions for the company.
Regarding the U.S. government, there's both state and local, and there's the federal government. State and local, by the way, has been extremely fast and very interested in adopting the cloud because they can benefit from the massive economies of scale. As a general matter, they have a very hard time hiring technical, capable folks to work in states or localities. Their move to the cloud and their interest in it is extremely high. In the federal government, there are, of course, many different levels, and many are trying and are moving to the cloud when they can. Some of these organizations have very special requirements, and many of our products are already certified for use, whether they're applications or technology.
Since the United States government, well, and state and local use a lot of Oracle technology, as a general matter, there's been a very open push and interest in moving to the cloud.
Okay.
I'm a stockholder, and my name is Mrs. Larry, and I don't know all this stuff you're talking about. My telephone came over with the Mayflower. I don't know all this stuff. The thing that I look at the most is, of course, the money. I just want to say, are you making some good things up at Oracle so that you'll give a little oomph to the stock price?
Okay. Well, I don't know much about the money. These guys do, so I'll let them answer.
Oh, I have one other thing. I just want to say something to Mr. Ellison. I don't know if you remember me, but a few years ago, let's say a long years ago, I bought stock, and I was telling you that I was trying to get some money from Oracle to buy a little boat. I finally got my dividends, so I bought my little boat. I want to thank you for that.
That makes me very happy.
Oh, there's more.
I did exactly the same thing.
I know. My boat isn't like your boat. I finally got to buy a motor for my boat. Now what I'm looking forward to is the gas for the boat. I'm just wondering if.
Well, talk to him about the gas.
Yeah. Okay, let's see what's going to happen so I can get to Hawaii.
Or her. Either of them can handle the question on the gas.
All right.
Well, we have many stakeholders, really the most important stakeholders are our owners, our shareholders, and that includes you. The way that we can be successful for you is to make our customers very successful and excited about our products. We invest over $5 billion a year in R&D alone, imagine, to make those customers successful. Of course, our employees are the ones that make it all possible. I'm sure you've noticed that not only are our revenues increasing and our earnings increasing, but in fact, our stock price has been going up.
Well, at any particular moment, we cannot take care of the market, but the part we focus on is making sure our earnings continue to go up. If we've got happy employees, happy customers, we should have happy shareholders.
Yeah. Just very recently, we hit an all-time high for our stock price.
Well, as the old saying goes, I can't afford to buy green bananas. That's why I'm just asking.
We'll get you some bananas, I think. The way I would think about it, and the way we think about it, is we don't focus specifically on the stock price. The stock price is a result. The stock price is a result of us performing. Us performing in context of growing our revenue, growing our cash flow, growing earnings per share. The decision we took, which is probably a decade long now, but really we activated three years ago, was this huge transformation to the cloud. Frankly, what you see in that stock price is escalation from 2010 to 2013-2014 of about 60%-70% improvement in the stock price, $20 to probably mid-30s. At that point, we made a bunch of financial decisions to invest in this transformation that Larry has spent a long time talking about. Building data centers around the planet. That cost us money.
Increase in our R&D, almost over $1 billion per year. We went from, I think, $3.7 billion-$3.8 billion to $5.2 billion. Why? Because we built all of these new applications, all of the new technologies that Larry was talking about. We've also increased the size of our sales force. That caused a three-year period of our stock price and our earnings and our cash flow being relatively flat. In the last year, the last 14-15 months, that has now changed. We're on a string of four quarters or so of roughly double-digit earnings per share growth. That is showing up because our revenue is now growing as we've made this transition from the business that was primarily on premise to now a business with our growth being driven out of the cloud.
To Larry's point earlier, he knows the numbers far better than he's describing with his statement. This is the beginning of that. Some of the numbers that Larry described shouldn't be gone over lightly. Our applications business is growing double digits in a market that's probably growing 2% or 3%. Last quarter, our applications business grew 18%. Our database business, the hallmark of the company, that market's growing 3% or so. We grew over the last trailing 12 months, roughly 5%. These things are the things you want to focus on, are those performance indicators. I predict for you, if we get those right and continue to do better, you will then get bananas.
I hope I can see a lot of yellow, beautiful bananas. Thank you, gentlemen.
Thank you.
Thank you.
America.
Hello. My name is Marcia Wells Lawson.
My God.
I am a shareholder. This is the first shareholder meeting I've been to here. It's kind of fun. All I want to do, I don't have any questions, I just want to say thank you for doing such a wonderful job and for always thinking way ahead of everyone else. Larry is right about two things. One, I can vouch for this as a former employee. It really does make him happy when his shareholders make money. Two, if you think about it, I've held my shares for 37 years, some of them. Some I've sold. Oracle hasn't lost me a penny because it's at an all-time high. Good job.
Thank you.
Thank you, Marcia. Nice to see you.
Okay.
Hi, my name is Deepak Kumar. Actually, I'm the longtime stockholder. First of all, I would like to thank you for creating thousands of jobs in the whole world, and the whole IT and the business is dependent on you, your progress, everybody's eyes on you. Like she was mentioning about the stock, I would like to say I'm holding the stock like last 20 plus year, five year, when actually the whole market went down. I have a faith on you saying that, "Hey, this stock is definitely is going to be steady." It's not like going like Amazon, like $1,000 and then going down. Like you have steady maintained in the market, and everybody is so happy. Thank you so much.
Another thing I would like to mention, because I was in the OpenWorld, and I was asking about some, like you were talking about Amazon. I said, "How do you feel about that?" People are very happy, say, "Hey, Larry is always top in the market and going forward, and he's going into the cloud," which is basically the whole world is going. He's always up in the market. We always like with Larry. Thank you so much.
Thank you. I think we're done. Thank you. Thank you very much.
There you have your answer.