To Everyone,
The ORCL recent app sales numbers are very interesting ... only a 7% increase over last year. I think there are several possible explanations for this slowdown:
1.) They just had a crappy quarter. I believe that ORCL's app sales are always inconsistent and hard to predict between quarters ... not nearly the predictable smooth uptrend that PSFT, SAP, and others typically deliver.
2.) The market for packaged apps isn't as big as people thought.
3.) Y2K is causing the slowdown.
4.) ORCL's losing market share big time to PSFT, SAP, and BAANF.
5.) ORCL has been inflating their previous app numbers from DBMS sales. Since DBMS sales are slowing, they have less $$$ to throw in the app bucket.
6.) Their DBMS sales drive a lot of their app sales (mainly because customers don't want to deal with multiple vendors). If DBMS sales slowdown, then app sales slowdown as well.
I think the reason for their weak app sales is a combo of 1, 4, 5, 6. Think it's too early to see Y2K impact ... this past quarter should have been one of the biggest to benefit from Y2K ... it's 2.5 years away and we shouldn't be seeing any impact for another 6 - 9 months. I really don't think it's #2 because this market is pretty untapped.
Think it may be mostly #4.
For the short term, ORCL's weak app sales numbers is definitely bad for the PSFT stock price. But if PSFT puts up big Q4 numbers and firmly establishes itself as #2 behind SAP for '97 ... watch out. If PSFT puts up disappointing Q4 numbers, think this'll confirm people's worries about Y2K and app market slowdown ... which would be very, very, very bad.
I think big Q4 PSFT numbers are much more likely. If PSFT just delivers what they've been forcasting and gives us the typical 2 cent/share surpise, forgettaboutit. This may be a great buying opportunity.
Comments? Especially on points #4 and #5 above. |
