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

To: zc66 who wrote (7592)	6/22/1998 12:01:00 AM
From: Punko	Read Replies (3) \| Respond to of 19080

The key to the paradox (better than expected earnings vs. stock underperformance) lies in earnings quality, product transitions, and short to mid term market landscape. DB growth was good but Q4 Apps business appears to have been a disaster; once again, Services stood out (low margin, however). Management themselves are saying "look out for Y2k and Asia going forward". Radical product transitions (apps, tools, rdbms) together with y2k and Asia will hurt Oracle over the next one to two years. But Apps Release 11, 11.5, and 12 will shine while SAP and Psft struggle with the inherent deficiencies of their model (i.e. their lack of engine ownership, the ability to leverage only lowest common denominator features of the engines they port to, and the overhead of supporting those separate code bases). Michelle makes excellent points about how Oracle blew a golden opportunity to take advantage of this, and this mistake is not lost on them. The apps business is the focus now, with Ellison at the helm, and my belief is that it will rise strong from the ashes with new vigor, but not until the early adopters bleed a little. The new Java/CORBA-based distributed objects architecture is the way of the future. I Credit Oracle for recognizing this before anyone else, except perhaps Sun, and for positioning the company as a credible provider of an attractive alternative to the proprietary and arguably inferior Microsoft model. Oracle's been working on the new technology for some time, but they must demonstrate its benefits in a bold way - hence the decision to drop client server in favor of NCA in release 11 - a gutsy, potentially very lucrative call. If it pans out, there's no stopping Oracle. Oracle's betting that client / server is dead; and open, standards based distributed object computing will take its place. If the stories from the early adopters begin confirming the theoretical benefits of Oracle's architecture, Oracle will roll in a big way, taking share from psft and sap, much the way msft ate up wordperfect and lotus (since Oracle owns the platform for Enterprise apps like Microsoft does for desktop apps). But before then, the road will be treacherous. But then again, don't the Chinese have a word for crisis that also means "opportunity"?