1) FY '98 ends in May.
2) apps/database business mix can be whatever the company chooses.
3) I'm not saying orcl's challenge in the midmarket is versus psft/sap/baanf - they will all have significant challenges. It is very hard for companies with 500k license/$2.5 million consulting projects to scale their sales force, products and pricing to meet the needs of the market segment of companies in the $5 to $200 million revenue segment. The direct sales people used to making quota on 3 to 5 deals year/won't stand for being forced (and won't be able to)to close 8 to 15 deals/year. Although all of the big 4 want to develop indirect channels, it takes 4 to 7 years to build a good var channel. Look at NOVL, GPSI, etc. Moreover, the companies with the best VAR channels DO NOT COMPETE in any way with their VARS. The "mid market" has many definitions, but I am extremely confident that the many challenges faced by the big four in penetrating these markets will not offset the maturation of their target markets.
4) I agree there are many new uses for databases and a small fraction of the world's data is relational, however: Just because there's room in the market for continued purchases does not mean that there will be continued growth at historical levels:
A) As MSFT SQL server scales up, price points will decline markedly
B) New applications and new vendors with different non relational arhcitectures will emerge
C) Even with flat pricing, growth is driven by ACCELERATING adoption rates. For instance if you sell to 1000 customers this year, you must sell to 1200 NEW customers next year to show growth. (this is somewhat offset by maintenance and the occasional upgrade, but the principle remains.
5) Y2K - I know that Oracle is not a y2k company. Not the issue. Even the company will grant that their business has been stimulated (acclerated early) by y2k. This must imply that the stimulus will end. It probably means that some customers who could have been buyers later have already puirchased. This means their target market is maturing early.
Conclusion: Despite my concerns, I'm not sure of the extent of the challenge, but I am confident that you will see a significant decline in growth rate in the 6 to 12 month timeframe. I'm not arguing for flat revenues or other disasters. But the mere decline in underlying growth will frighten investors.
Trader Dave |
