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Technology Stocks : Oracle Corporation (ORCL)
ORCL 192.32+6.9%3:59 PM EST
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To: Bipin Prasad who wrote (9236)12/24/1998 2:44:00 PM
From: John Wright  Read Replies (1) of 19080
 
Bipin, market and business risk is always a factor to consider. If the economy in 1999 starts showing signs of serious weakness and begins cutting into corporate profits then sure corporate America will react by reevaluating their capital spending plans. However, capital spending is an 'investment' not an 'expense'. Companies will still continue to invest money in those areas where there's a payback or ROI(return on investment). As I mentioned in one of my earlier posts (last week), the Fortune 2000 are aLways looking for ways to squeeze costs from their corporate infrastructure. Whether it's in operations on the shop floor or in SG&A at the Head Office. IT spending is no different. If Oracle's vision of 'Internet' computing can offer enterprise wide business solutions that significantly lower a companies total cost of IT ownership(TCO) then companies will continue to buy it. TCO is also just one small part of the IT investment decision. We're seeing a real revolution in information technology through the internet. In 5 years we now have 50 million people connected to this inexpensive means of mass communication. If companies like Oracle can offer web based business-to-business or business-to-customer IT solutions that bring B2B and B2C closer together in an easy and inexpensive vehicle like the internet, then companies will also continue to make the IT investment.

Thoughts, opinions,anyone?

John

P.S. If half of 1999 capital spending DOES get spent on Information technology then I'm not so sure their's too much to be worried about.
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