<<I still have my doubts about their staying power.>>
Despite competition from above (IBM) and below (MSFT) in their core database business and tough competition from SAP, SEBL, and others in the application business ORCL's staying power may actually be increasing.
Continued Demand - The data being generated ad infinitum by all the ERP, CRM, and SCM applications that continue to come on-line will drive database demand. Additionally, all the multi-media content on the net will continue to drive database size, usage, etc.
B2B Exchanges - The industry exchanges will hold a vast amount of transactional data, they are all looking to use the database information and BI tools to provide value added services (e.g., transparency reports, optimization analysis, etc.), and there will be thousands of them. Even if ORCL loses out to ARBA and CMRC for the full application suite it should drive huge database sales.
Database Barriers to Entry – Many companies are using the ORCL database and tools to develop, store, and manage the business rules which make their applications “adaptive”. This will create barriers to entry for ORCL competitors and switching costs for ORCL customers.
Web Application Switching Costs – As companies implement the new web based ORCL applications, they begin to imbed the application into their internal workflow to a far greater degree (e.g., by pushing procurement out to a department or individual rather than limiting it to the purchasing department) and into the workflow outside the enterprise as they implement SCM and CRM applications. This trend has very positive long-term implications for the ORCL applications business.
Remote Databases - Many of the same forces driving NTAP and EMC should drive database sales over time. In the future, as network speeds increase it will create a “hollowing of the PC” allowing even PC and enterprise server based data to be easily and cost effectively stored in remote databases which will drive demand for ASP delivered database services. |
