Microsoft is the world's top software company and now Oracle has become No. 2 business software maker by revenue after pushing IBM to the third position.

On Wednesday, October 16, IBM reported software revenue totaling $25.7 billion in the last four quarters. However, rival Oracle's software revenue surpassed IBM and reached $27.8 billion in the same period.

"Given IBM's recently announced quarterly results, we would like to take this opportunity to point out that Oracle's software business has been growing faster than IBM's software business and now Oracle has moved up to become the number 2 software company in the world while IBM has slipped to number 3. Over IBM's last four quarters, they reported software revenue totaling $25.7 Billion, while during Oracle's last 4 quarters, we reported software revenue totaling $ 27.8 Billion," per Oracle's press release.

The company has already taken the No.2 position and it seems that it has bigger plans of reaching the top position in the future.

"We will continue to develop innovative software products and related cloud services in pursuit of becoming number one," said Satra Catz, Oracle President and CFO.

Oracle, IBM and other software vendors usually make money in the software business from customers who buy software licenses and maintenance, such as updates, patches, fixes and support when things go wrong. Customers usually stick to the software they use and, therefore, keeps software business going for companies like Oracle.

Even though Oracle has become the second largest software company in the world it still lags behind IBM in many business streams.

The company's hardware revenue for the last four quarter period is $5.25 billion, which is just around 33 percent of IBM's hardware revenue, which reached $15.87 billion in the same period. Similarly, Oracle's total revenue which stands at $37.37 billion is just over a third of IBM's $101.36 billion total revenue.

The software revenue difference between Oracle and IBM is over $2 billion. IBM may try its best to pull back things and get back the No.2 position. It will be interesting to see for how long Oracle is able to retain the crown for the second largest software company in the world.  

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