Sorry, No harm meant Steve, in general on SI there seems to be a strong bias one way or another. IMO any stock is a list of pro's and cons and given your background, I was surpirised to see only the negatives coming out.
Oracle, microsoft and other very large software companies will likely see their revenues flatten out, most people on the street tend to look at growth rates and extrapolate them in perpetuity -- illogical and dangerous in my opinion.
Oracle has always had a flat q1 because of their business structure - sales plans combined with the worst of the summer months. It is unrealistic to compare oracle's q1 performace to the prior year's q4.
Oracle is far larger than the other companies you site and the law of large numbers will clearly kick in with their size.
1) Oracle has been striving to build its consulting business for some time, the company is claiming its a growth driver and a profitable business -- this is a mixed bag because they compete with the major consultants and integrators. However, relations with the consultants are supposedly improving because sap and baan are going after the services business now.
The consulting business is good business because it will help pad the inevitable slowdown in growth going into late next year as the y2k logjam hits.
2) Oracle is doing a solid job in the apps business, as opposed to Baan's buy it all approach, oracle is doing a good job of integrating with best of breed vendors like I2, an approach favored by many of their large potential customers. this should be agood growth driver going forward.
3) The dbms business is the great unknown. All numbers indicate the oracle is gaining share from sybs and infmx, but there is some concern in my mind with IBM and MSFT. ORCL claims market share gains versus MSFT on NT - this is dubious and temporary in my opinion. They have gained share by entering the market and selling to their existing customers on NT, but long term i think MSFT will win. The question is will database pricing become more commodity like? Near term UNIX still outclasses NT for performance, but (per VNTV and their ditributed capability) NT and SQL server have better distributed capability. There seems to be a growing market for dbms usage - web and commerce servers, data warehousing, new apps like cis etc. The $64,000 question will be dbms business this quarter which will probably show mid teens type growth.
4) The NC stuff, like the mediaserver fluff of a few years ago is a PR flag waving exercise. It's helpful to positioning Oracle as a visionary company, can be helpful in rallying folks against the larger bigger enemy, Microsoft. if it becomes important echnology, it shifts a substantial portion of the IT burden to Oracle Land - the server.
IMO opinion, if the company pulls off a decent quarter (esp in dbms) oracle is a decent short term trade, there's a lot of concern about the recent weak dbms comparison, if that's resolved you'll see sigh of relief purchasing by institutions. Oracle clearly has some issues, but it is relatively inexpensive compared to msft baan sap and psft.
TD |
