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Technology Stocks : Oracle Corporation (ORCL) -- Ignore unavailable to you. Want to Upgrade?

To: alydar who wrote (16283)	10/25/2001 11:33:45 AM
From: Hardly B. Solipsist	Read Replies (1) \| Respond to of 19079

I can't figure out whether the "increased competition" they are worried about is IBM's products getting better (which I think is unlikely) or IBM paying people to use the products (which they did with their app server to win the eBay deal). If the latter, I suppose that IBM can make it harder for everyone for a while, but there is plenty of evidence that the cost of ownership of DB2 isn't that affected by the cost of the software itself, and I believe that ORCL makes good use of this evidence. (And Websphere is reputedly so bad that even IBM could go broke bribing people to use it.)

To: alydar who wrote (16283)	11/14/2001 3:35:12 PM
From: Brian Sullivan	Respond to of 19079

Oracle's second consecutive profit warning is sending up red flags that perhaps its problems aren't macroeconomic but fundamental issues with the company itself. On Nov. 13, Chairman Larry Ellison said Oracle (nasdaq: ORCL - news - people) would miss second-quarter earnings estimates by up to two cents per share, and cautioned against a 20% year-over-year decline in software license revenue. Ellison and Chief Financial Officer Jeff Henley blamed macroeconomic issues and the Sept. 11 terror attacks, but some analysts say there's evidence that the weakness at Oracle is of its own making. "The applications business is facing renewed competition from all angles...the recent results and change in marketing strategy have generated questions about the actual potency of [Oracle's application suite called] 11i," says Drew Brousseau of SG Cowen. Even worse, he says Oracle's flagship database business, while still the market leader, is under attack from IBM (nyse: IBM - news - people) at the high end and Microsoft (nasdaq: MSFT - news - people) at the low end. IBM's database revenue grew 31% year-over-year in the third quarter and Microsoft's grew 40%, but Oracle's database revenue fell 8% in the same time period, Brousseau says. Its database business may be suffering as a result of its push into applications. Until relatively recently, leading software makers such as Siebel Systems (nasdaq: SEBL - news - people) and SAP (nyse: SAP - news - people) were tight partners with Oracle, recommending Oracle databases to customers who wanted to install their applications. Applications like human resources and supply-chain management need to run on top of a database. But since Oracle started aggressively competing with its partners--including publicly criticizing their products--the application makers have cozied up to IBM. In an attempt to offset flattening growth in other areas, Oracle is making a big push into application server software, a crowded but fast-growing market. To focus attention on this third leg of the business, Oracle will start breaking out application server financials beginning in the current quarter, which ends Nov. 30. Oracle shares were at $14.34 in midday trading, off more than 40% year-to-date. Still, with its growth stagnating and no apparent short-term recovery in sight, even that might be too pricey. SG Cowen downgraded Oracle from "buy" to "neutral" today, and noted that there is "very little upside" to Oracle shares at these levels and that the stock could fall further, to $10. "The company is still in the midst of what is shaping up to be a long and protracted recovery," says Brousseau, "with no emergence expected in the near future." forbes.com