Robertson Stephens comments on the ORACLE entry. The CRM aspects are most pertinent to NETP although NETP is also trying to get into the supply chain (e.g. its new customer Best Buy).
B2B eCommerce Update - Eric Upin - eric@rsco.com
ORACLE'S WEB APPS AIDING GROWTH
The robust market for B2B applications is opening new areas of growth for Oracle Corporation (ORCL $84-11/16), a technology bellwether that is leveraging its historical leadership in databases to move into Web-based supply chain, procurement and customer relationship management software. In our view, applications represent the sweet spot of B2B - automating and tying together business processes among buyers and suppliers. For example, Oracle, Commerce One (CMRC $49-5/16) and i2 Technologies
(ITWO 158-1/4) are the primary technology providers to Covisint, an automotive parts exchange in development that is being billed as the Internet's largest marketplace.
We believe Oracle's applications business, which includes
enterprise resource planning and B2B solutions, will drive upside to our revenue estimates for the current quarter. In the fiscal first quarter of 2001, a seasonally weaker period, we have published a revenue forecast of $2.27 billion and EPS of $0.13, with operating margin expanding to 21.5%. Our conservative expectation for Q1 apps license revenue is $170 million, representing 56% year-over-year growth.
Although in many respects the company is playing catch-up to the leaders in each applications segment - among them i2 in supply chain, Siebel Systems (SEBL $179-3/4) in CRM, and Ariba (ARBA $150) in procurement - Oracle has the opportunity to offer the most comprehensive solution in the long term. In the nearer term, we believe the market is growing quickly enough to allow many players to prosper. In addition to tracking Oracle's execution on application development, we will be looking for continued
improvements in the company's internal cost cutting initiatives, as well as its streamlined sales strategy, which includes an aggressive campaign to standardize pricing, information and negotiation, facilitated by the Web. |
