Is Oracle (NASDAQ:ORCL)'s and Adobe (NASDAQ:ADBE)'s growth organic or driven by acquisition? I see a few articles running this morning all excited about an uptick in enterprise software market revenue, in particular this article on Business Week's site. Before you get all excited too in making enterprise-software investment decisions, make sure you look at the numbers from an apples to apples perspective.
The good news from Red Hat (NYSE:RHT) is good news, as the company begins to get the payoff of acquisitions such as JBoss from three or four years ago. And although Progress (NASDAQ:PRGS) had a small acquisition last year, its growth surprised me.
On the other hand the good news from Oracle and Adobe may in fact be good news (as opposed to a decline) but the growth numbers are inflated by acquisitions. I have not had time to do the arithmetic (in fact I have found that it doesn't make sense to do the arithmetic so early in the year based on one quarter) but it looks more like both companies are about flat on an apples to apples basis. Everyone's models also have to be changed to reflect the open-source-related revenue now in Oracle's stream
- Did Oracle just jump ahead of IBM into number-two position in open-source-related revenue? Maybe!
- Does it matter? No (see "There Is Still No Open Source Software Market")!]
Flat may still be good if -- as I am guessing -- we're looking at a double dip.
Also remember that any comparison with the Nov 2008-Feb 2009 time period is going to be the best compare an enterprise software supplier CFO is ever going to walk into the board room with.
Disclosure: No position on mentioned companies; however I have done market research for all companies mentioned.