Oct. 20, 2014, 9:19 AM
- IBM missed Q3 estimates, pulled its $20 2015 EPS forecast, and respectively reported 15% and 7% Y/Y drops in hardware revenue and services backlog.
- Big Blue also stated it "saw a marked slowdown in September in client buying behavior," and declared its numbers "also point to the unprecedented pace of change in our industry" (at least partially a reference to cloud services adoption).
- SAP missed Q3 revenue estimates (while posting in-line EPS), reported a 3% Y/Y drop in traditional software license revenue, and (citing the cloud transition) cut its full-year op. profit outlook.
- Microsoft (NASDAQ:MSFT) -0.8% premarket. H-P (NYSE:HPQ) -2% premarket. Oracle (NYSE:ORCL) -1.8%. EMC -0.8%. There's a good chance other enterprise IT names will trade lower as well.
Oct. 1, 2014, 10:20 AM
- New Oracle (ORCL -0.3%) co-CEO Safra Catz: "We’re No. 1 in database, we’re No. 1 in middleware, but we’re No. 2 in applications ... At Oracle, silver medal is first loser."
- Catz's remarks come two weeks after SAP (presumably the company deemed #1 in apps) agreed to pay $8.3B to buy leading cloud travel/expense management software vendor Concur Technologies. Plenty of cloud software stocks rallied in response, as investors bet the deal would trigger fresh M&A activity in an industry that has already seen plenty.
- They also come two weeks after Oracle reported light software license growth amid slumping database sales and intense cloud competition.
- Oracle has already bought a long list of enterprise software firms in recent years. Major cloud-related purchases include marketing automation software vendors Eloqua and Responsys, customer support software firm RightNow, talent management software firm Taleo, and sales quote software provider BigMachines.
- More recently, Oracle paid $5.3B to buy point-of-sale hardware/software firm Micros. Thanks to its M&A binge and huge buybacks, Oracle had $32.6B in debt as of Aug. 31 to go with $51.6B in cash/investments.
- Yesterday: Oracle launches flurry of new products
Sep. 30, 2014, 2:48 PM
- Oracle's (ORCL -0.2%) PR department has been in overdrive as the company's annual OpenWorld conference progresses. More than a dozen hardware, software, and cloud services offerings have been launched or refreshed.
- Hardware launches include: 1) The FS1, a hybrid flash/disk storage system featuring software that tries to optimize price/performance through "fine-grain autotiering" of storage types. It faces competition from EMC, NetApp, H-P, and many others. 2) A new Exalytics In-Memory Machine (competes against systems running SAP's Hana) that delivers large performance/memory improvements. 3) A database recovery appliance said to deliver "zero data loss protection" for live databases.
- Software launches include: 1) Updates to Oracle's cloud ERP, HR, and CRM apps. The HR apps (face competition from Workday and SAP) have been given design changes meant to appeal to casual users, and the CRM apps now integrate BlueKai's data management platform. 2) New features for Oracle's Fusion middleware meant to improve data integration for cloud services and mobile apps. 3) A new release for the open-source MySQL database (has been losing ground to MariaDB).
- Cloud services launches include: 1) 6 new services for Oracle's cloud app platform (playing catch-up against Microsoft and Salesforce). 2) A Business Intelligence Cloud Service that joins Oracle's Analytics Cloud portfolio. 3) Mobile app development services meant to allow non-technical users to build apps.
- Oracle is counting on the launches to put a halt to its recent top-line struggles, caused in large part by soft hardware and database sales.
Sep. 24, 2014, 2:33 PM
- John Chambers has dismissed speculation Cisco (CSCO +1.3%) could make a bid for EMC (EMC -1.1%). "If [EMC CEO Joe Tucci] and I were going to do something here, we would have done it a year or two ago."
- Likely an issue today: A Cisco deal would raise antitrust issues in the network virtualization/SDN software space, where VMware (VMW -0.3%) and Cisco have emerged as the early leaders. Also, Cisco's storage networking unit relies on OEM deals with EMC rivals (in addition to EMC).
- Meanwhile, re/code reports Oracle (ORCL +1.5%), another company whose name was thrown around in EMC deal speculation, is also uninterested.
- Recent reports stated EMC has held merger talks with H-P, but failed to agree (for now, anyway) on a price. Sources (possibly hoping to drum up M&A interest in EMC) added a deal with Cisco or Oracle was also possible. Re/code backs up the part about the H-P talks, while adding H-P was largely interested in owning VMware VMW via EMC.
- Many on the Street still think EMC will make a deal before Tucci's planned Feb. 2015 retirement. Tucci hasn't named a successor yet; Argus' Jim Kelleher consider ex-CFO David Goulden, now the head of EMC's storage hardware/software unit, to be the favorite. VMware CEO Pat Gelsinger and Pivotal CEO Paul Maritz are also in the running.
Sep. 24, 2014, 2:03 AM
- Oracle's (NYSE:ORCL) new co-CEOs Safra Catz and Mark Hurd will receive a one-time option to purchase 500K shares of Oracle apiece, while outgoing chief exec Larry Ellison, will receive 750K fewer shares for the 2015 fiscal year.
- The new top execs also qualify for performance-based bonuses of 125K shares each, on top of the 562.5K shares of performance-based stock granted to them both in July.
- However, the company is slashing its long-term exec compensation program, lowering Catz and Hurd's total stock options to 2.75M a piece from 5M a year earlier.
Sep. 19, 2014, 4:54 PM
- Though Oracle's (ORCL -4%) cloud-related sales saw healthy growth in FQ1, its core database business saw negative license growth, notes Deutsche's Karl Keirstead, downgrading shares to Hold. "Coupled with Larry Ellison’s decision to give up the CEO role, our confidence in the core database business is getting tested and we’d prefer to step to the sidelines while Oracle shares are still near their 10-year high."
- While Oracle blames the database weakness on tough comps and sales execution - the latter is a common excuse among enterprise software firms - Keirstead also sees other factors at work: A mature relational database market; Microsoft's share gains; and a secular shift to new data types (e.g. Hadoop/NoSQL) and cloud apps (often running on non-Oracle databases). He estimates Oracle's FQ2 guidance implies a 3%-4% Y/Y drop in license revenue.
- D.A. Davidson (Neutral) also isn't thrilled with Oracle's numbers. "ORCL's financial results have now either missed or come in at the low end of management's guidance range in 7 of the last 9 quarters." Ditto Sterne Agee: "Given the current moderate size of the cloud business, the transition will span several years and create both revenue and EPS estimate volatility."
- On the other hand, Sterne (like many others) isn't concerned about Oracle's CEO change, calling it "more of a change in titles than in functions." On the CC (transcript), new co-CEOs Safra Catz and Mark Hurd insisted there will be no major operational changes.
- Wedbush, however, sees negative long-term implications. "Mr. Ellison's desire to delegate more responsibility (and credit) to Safra Catz and Mark Hurd is understandable ... but it underlines our view that Oracle's days as an organic grower are rapidly coming to an end."
- Prior Oracle coverage
Sep. 18, 2014, 5:40 PM
- Oracle (NYSE:ORCL) guides on its FQ1 CC for FQ2 Y/Y revenue growth of 0%-4%, and EPS of $0.66-$0.70. That's below a consensus for 4.8% growth and EPS of $0.74.
- Software/cloud revenue is expected to grow 3%-6% Y/Y vs. 6% in FQ1, and hardware revenue is expected to be flat to down 10%. SaaS/PaaS revenue is expected to grow 39%-44%, and IaaS revenue 40%-44%.
- Oracle largely blames the near-term weakness on a transition to cloud subscriptions from up-front licenses, though it also admits execution issues are hurting hardware and services sales. Micros is expected to provide a slight boost to FQ2 results.
- Shares -2.3% AH.
- Prior Oracle coverage.
Sep. 18, 2014, 4:29 PM
- Oracle (NYSE:ORCL) has added $13B to its buyback plan; that's good for repurchasing 7% of shares at current levels. As it is, $2B was spent on buybacks in each of the last three quarters.
- Software and cloud revenue (76% of total revenue) rose 6% Y/Y in FQ1 to $6.6B, hitting the low end of guidance for 6%-8% growth. However, new software license revenue (pressured by cloud competition) fell 2% to $1.37B.
- License update/product support revenue (fairly stable) rose 7% to $4.7B. Cloud app (SaaS) and app platform (PaaS) revenue rose 32% to $337M, towards the high end of guidance for 25%-35% growth. Cloud infrastructure (IaaS) revenue grew 26% to $138M, topping guidance for 10%-20% growth.
- Hardware revenue (hurt by UNIX server declines) remains weak, falling 8% to $1.17B; that's soundly below guidance for -1% to +3% growth. Hardware products -14%, support -1%. Services revenue -7% to $855M.
- GAAP opex +2% to $5.6B; sales/marketing spend +5% to $1.71B, R&D +7% to $1.32B.
- Shares -2.3% AH. CC at 5PM ET, guidance will be provided.
- FQ1 results, CEO news, PR
Sep. 18, 2014, 4:11 PM
- Along with its FQ1 results, Oracle (NYSE:ORCL) announces Larry Ellison is resigning as CEO. President/ex-H-P CEO Mark Hurd and CFO Safra Catz will act as co-CEOs going forward.
- Ellison, 69, is taking over the role of chairman from Jeff Henley, who has held it for 10 years, and has also been named CTO. Henley is now vice chairman.
- Sales, service, and "vertical industry global business units" will report to Hurd. Manufacturing, finance, and legal teams will report to Katz. Software and hardware engineering teams will continue reporting to Ellison.
- Director Michael Boskin: "Larry has made it very clear that he wants to keep working full time and focus his energy on product engineering, technology development and strategy."
- Shares -2.7% AH following the news and Oracle's FQ1 miss.
Sep. 18, 2014, 4:03 PM
Sep. 17, 2014, 5:35 PM
Sep. 15, 2014, 7:30 AM
- A provider of content storage management solutions that help companies mitigate, manage, and monetize large-scale media assets, Front Porch Digital helps businesses handle fast-expanding, complex volumes of digital media content like high-def films and shows, medical images and records, and real-time security-monitoring fees.
- Terms of Oracle's (NYSE:ORCL) purchase were not disclosed.
- Source: Press Release
Sep. 11, 2014, 7:08 PM
- After moving back above the $100/share level, Apple (NASDAQ:AAPL) is back over the $600B mark in market cap, pushing it nearly $200B above Exxon Mobil (NYSE:XOM), the next largest company in the U.S.
- XOM is still valued at more than $400B, but Google (NASDAQ:GOOG) at $397B and Microsoft (NASDAQ:MSFT) - which has surged in 2014, adding $74B in market cap to $386B - are closing the gap.
- Berkshire Hathaway (NYSE:BRK.B) completes the top five with a $339B market cap; no other companies are worth more than $300B.
- Rounding out the top 20 market caps: JNJ, WFC, GE, WMT, CVX, PG, JPM, FB, VZ, IBM, PFE, KO, ORCL, T, MRK.
Sep. 2, 2014, 5:28 PM
- Concur (NASDAQ:CNQR) approached SAP and Oracle (NYSE:ORCL) to "gauge their interest" in an acquisition, sources tell Bloomberg. Oracle, set to buy point-of-sale hardware vendor Micros for $5.3B, is said to have passed.
- No details are given on SAP's reaction. Back in January, the German software giant suggested it could make another big cloud software acquisition - it already has a few under its belt. But in April, SAP, which is counting on cloud growth to offset slumping traditional license sales, stated it considers itself under no pressure to make a deal.
- Concur has pared its AH gains: The cloud travel/expense software provider is now up 11%. Its market cap stands at $6.4B.
- Earlier: Concur reportedly exploring sale
Aug. 27, 2014, 7:21 PM
- IDC estimates global server sales rose 2.5% Y/Y in Q2 to $12.6B. That marks a turnaround from the 2.2% drop seen in Q1, and the 4.4% drop seen in Q4. Gartner estimates sales grew 2.8%.
- IDC declares the server market, hurt in recent quarters by system consolidation and a shift in demand towards the white-label gear beloved by Web giants (referred to by IDC as ODM Direct), is seeing "the beginning of a cyclical refresh cycle." It sees the pending launch of Intel's (NASDAQ:INTC) Grantley Xeon CPUs, along with Microsoft's plans to end Windows Server 2003 support, lifting sales into 2015.
- Sales of x86 servers (mostly Intel-based) rose 7.8% in Q2, and now make up 78% of industry revenue. Non-x86 server sales fell 12.8%.
- Market leader H-P's (NYSE:HPQ) share rose 40 bps Y/Y to 25.4%, with x86 growth offsetting Itanium weakness. #2 IBM's share fell 340 bps to 23.6% ahead of the sale of its x86 server ops to Lenovo; on the bright side, IBM's decline narrowed from Q1's 600 bps.
- #3 Dell's share fell 160 bps to 16.2%. #4 Oracle's (NYSE:ORCL) grew 10 bps to 5.9%, with engineered system growth offsetting declines for older UNIX/SPARC server lines. #5 Cisco (NASDAQ:CSCO), which recently proclaimed its UCS server ops are on a $3B/year run rate, saw its share rise 140 bps to 5.8% on the back of 35% growth. Cisco should pass Oracle in a quarter or two.
- ODM Direct vendors saw their share grow 110 bps to 6.6%. The shares of all other vendors rose 190 bps to 16.1%.
- Related tickers: SMCI, MLNX, QLGC, ELX
Jul. 31, 2014, 2:01 PM
- Oracle (ORCL -0.8%) is buying TOA Technologies, a developer of cloud-based software for managing, interacting with, and delivering customer requests to a company's field service workers. Terms are undisclosed.
- TOA's clients include Home Depot, Vodafone, and Dish Network; ClickSoftware (CKSW -0.3%) is among its rivals. The company's products complement Oracle's Service Cloud platform, which has its roots in the company's acquisition of cloud customer support software vendor RightNow.
- Oracle has been busy fleshing out its CRM software portfolio in order to better compete against Salesforce (relies on partners for field service software ... for now) and SAP. The software giant bought leading cloud marketing data services firm BlueKai earlier this year, and CRM price quote software vendor BigMachines last year.
ORCL vs. ETF Alternatives
Oracle Corporation develops, manufactures, markets, hosts and supports database and middleware software, application software, cloud infrastructure, hardware system including computer server, storage and networking products and related services.
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