Feb. 27, 2014, 7:07 PM
- With enterprise server sales under pressure and the cheap white-label servers used by the Googles and Amazons of the world gaining more ground, IDC estimates global server revenue fell 4.4% Y/Y in Q4, a decline steeper than Q3's 3.7%. Gartner estimates revenue fell 4.5%.
- IDC thinks market leader H-P (HPQ), which posted relatively healthy enterprise hardware numbers for its January quarter, saw its share rise 260 bps Y/Y to 26.9%. #2 IBM, whose hardware ops had a brutal Q4, saw its share drop 910 bps to 26.8% in what's typically a seasonally strong quarter for the company.
- #3 Dell is assigned a 14.5% share (+30 bps). #4 Cisco (CSCO), whose UCS server unit remains a bright spot, is given a 4.5% share (+130 bps). Following many quarters of share losses, engineered systems growth allowed #5 Oracle's (ORCL) share rose 10 bps to 4.1%.
- White-label server sales, referred to by IDC as ODM Direct, soared 47% Y/Y, and now make up 6.4% of industry revenue. "Density-optimized" server sales, which include white-label gear and OEM offerings, soared 70%. H-P has a 34.9% share.
- A positive for Intel (INTC): x86 server sales rose 7.8%, up from Q3's 2.8% clip. A positive for Red Hat (RHT): Linux server sales rose 14.4% vs. 5.6% in Q3, and now make up 28.5% of industry revenue. Windows server sales (45.7% of revenue) were nearly flat, Unix sales (13.6% of revenue) fell 20.2%.
Feb. 24, 2014, 12:23 PM
- Two months after agreeing to buy cloud marketing automation software vendor Responsys for $1.5B, Oracle (ORCL +0.8%) has struck a deal to buy BlueKai, developer of a popular, cloud-based, data management platform (DMP) for online, offline, and mobile marketing data.
- Business Insider reports the purchase price is around $400M. AdExchanger reports a $350M term sheet was signed a month ago, but adds the price tag may have gone up since.
- Forbes states BlueKai, which competes against Adobe's (ADBE +1.1%) AudienceManager DMP, had 2013 revenue of $64M. The deal might pressure Salesforce (CRM +1%), which has been gobbling up cloud marketing software firms itself in an attempt to build an end-to-end platform, to acquire a BlueKai rival, given the company doesn't yet offer a DMP.
- Constellation Research's Ray Wang thinks BlueKai's mobile DMP solution is the startup's "crown jewel," and fills a major hole in Oracle's product line. AdExchanger observes Oracle could struggle with conflicts of interest for BlueKai's data exchange business (separate from its DMP), whose neutral stance towards 3rd-party cloud marketing platforms has been a selling point.
- Oracle says BlueKai will be integrated with both Responsys and Eloqua's cloud marketing offerings.
Feb. 24, 2014, 11:36 AM
- IBM (IBM +1%) is acquiring Cloudant, provider of a distributed cloud database platform for app developers. Terms are undisclosed.
- Cloudant's customer base includes Samsung, Microsoft, Adobe, and Fidelity. The company already relies on IBM-acquired SoftLayer's cloud infrastructure platform to deliver its services, which compete against Amazon Web Services' DynamoDB and solutions based on the open-source MongoDB.
- All three solutions rely on NoSQL, a database architecture that differs from the age-old SQL (used by IBM's DB2, as well as ORCL's bread-and-butter database) through its support for semi-structured and unstructured data.
- This feature, along with NoSQL's superior performance and scalability for certain apps, is leading the technology to be widely adopted for handling Web/cloud services and big data projects.
- Separately, IBM is promising to invest $1B to bolster SoftLayer's cloud software/app platform offerings. Last month, Big Blue, increasingly looking to cloud services to halt its ongoing revenue declines, said it would invest $1.2B to build 15 new data centers for SoftLayer.
- IBM/SoftLayer rival Rackspace (RAX +2.4%) owns a piece of Cloudant.
Jan. 22, 2014, 7:10 PM
- Following a transfer in analyst coverage, Deutsche has upgraded Microsoft (MSFT), Oracle (ORCL), and Conqur (CNQR) to Buy, and downgraded Salesforce (CRM) and Citrix (CTXS) to Hold.
- Analyst Karl Keirstead, formerly at BMO, likes Microsoft's valuation, thinks (like Evercore) the company doesn't get enough credit for its enterprise ops amid PC concerns, and is hopeful a new CEO will cut costs.
- Regarding Oracle, Keirstead thinks concerns about share loss to cloud app providers are priced in at a valuation of 11x 2015E EPS, and thinks app weakness can be offset by database strengths. It's worth noting some think database sales will also be pressured by cloud adoption.
- Keirstead believes "the near-term set-up is not ideal" for Salesforce, even if the company remains "an attractive medium-term play on the cloud computing trend." He cites slowing organic billings growth, Japanese weakness, and the major sales leadership overhaul carried out ahead of Salesforce's pivotal January quarter.
- MSFT +0.7% AH. ORCL +0.7%. CRM -0.4%. CTXS -0.7%.
Jan. 7, 2014, 9:59 AM
- Oracle (ORCL +0.2%) is acquiring Corente, developer of a software-defined networking (SDN) platform for carriers, for an undisclosed sum. (PR)
- Corente's SDN platform, like rival solutions, uses a software-based controller to dynamically manage and provision networking resources. It's backed by a cloud services exchange the company asserts can speed app/service delivery over carrier networks.
- Cisco and Juniper have also acquired carrier SDN startups, and Alcatel-Lucent's Nuage Networks unit is eying this space as well. MKM recently predicted carrier SDN adoption will take off in the 2016-2017 timeframe, and (owing to the ability of SDNs to leverage commodity hardware) in doing so pressure Cisco's carrier switch/router sales.
- The Corente acquisition follows Oracle's 2013 purchases VoIP infrastructure hardware/software vendor Acme Packet and telecom signaling software firm Tekelec. Larry Ellison has declared Oracle aims to be "the primary technology provider to the telecommunications industry."
Dec. 20, 2013, 6:21 PM
- Responsys (MKTG +40.4%) closed today at $27.40, $0.40 above Oracle's (ORCL -0.6%) $27/share acquisition price. Meanwhile, fellow cloud marketing automation software firms Marketo (MKTO +11.3%) and Constant Contact (CTCT +6.8%) closed up sharply.
- Sources tell the WSJ SAP (SAP +0.8%) was "among the final bidders" for Responsys before Responsys decided to sell to Oracle. An analyst talking to the paper thinks Responsys' trading price suggests investors are betting on an SAP counteroffer arriving.
- FBR, on the other hand, thinks Oracle's deal could lead either SAP or NetSuite (N +2.2%) to acquire Marketo. Both SAP (courtesy of the hybris acquisition) and NetSuite (via its SuiteCommerce platform) are major players in e-commerce infrastructure software, but neither have leading positions in online marketing automation.
- Forrester argues Oracle's move will improve the company's "capable but otherwise moribund" marketing software lineup. Goldman notes Oracle is paying 8x Responsys' recurring annual revenue - a steep multiple, but less than the 11x it paid for Eloqua.
Dec. 20, 2013, 9:33 AM
- Oracle (ORCL -0.1%) is acquiring cloud marketing automation software firm Responsys (MKTG) for $1.5B, or $27/share, in cash. The price represents a 38% premium to Responsys' Thursday close. The deal is expected to close in 1H14.
- Oracle has already made several online/social media marketing software acquisitions in recent years, the largest being its $871M purchase of Eloqua. Responsys' products, like Eloqua's, will be added to Oracle's Customer Experience Cloud, which offers a number of cloud-based sales/marketing software products..
- Oracle is doubtlessly looking to better compete against Salesforce (CRM +0.5%), which just spent $2.5B to buy marketing automation software vendor ExactTarget. The deal fueled hopes Responsys or Marketo (MKTO) would be acquired as well. Marketo and Constant Contact (CTCT +4.2%) are trading higher in response to the deal.
- Adobe (ADBE) is also moving aggressively in this space; it recently bought French marketing automation vendor Neolane for $600M. Oracle, Salesforce, and Adobe, along with SAP and IBM, are each trying to profit from an ongoing shift in ad spend towards digital channels (inc. social media), and a shift in IT spend towards CMOs.
Dec. 19, 2013, 12:49 PM
- With Oracle's (ORCL +5.5%) shares nearly flat YTD going into the company's FQ2 report (in a year that seen the Nasdaq rise over 30%), investors are giving a thumbs-up to a revenue beat and in-line guidance. Improving hardware product trends - Oracle's guidance suggests positive growth might finally be seen in FQ3 - is also probably going over well.
- Nomura's Rick Sherlund considers Oracle's 1% Y/Y FQ2 software license/cloud subscription sales drop (in-line with guidance) "favorable after a few disappointing quarters in February and May."
- Likewise, MKM's Israel Hernandez thinks the numbers suggest "the worst may finally be behind Oracle with new product cycles providing an opportunity to re-accelerate growth," even if the company still faces "secular challenges" (read: cloud competition) in several markets.
- On the CC (transcript), Mark Hurd declared Oracle's sales execution (a problem earlier this year) was "solid" in FQ2, and CFO Safra Catz suggested Oracle is done ramping its sales capacity, and will now focus on improving productivity.
- Larry Ellison insisted Oracle's cloud infrastructure (IaaS) offerings will be "price competitive" with Amazon, Microsoft, and Rackspace; the first two companies have been pricing very aggressively. He also asserted Oracle's database and Java expertise will give it an edge in the cloud app platform (PaaS) market, where it's trying to play catch-up against Salesforce, Amazon, Microsoft, and Google.
Dec. 18, 2013, 5:21 PM
- Oracle (ORCL) guides on its FQ2 CC (webcast) for 2%-6% Y/Y FQ3 revenue growth, and quarterly EPS of $0.68-$0.72. Those figures are in-line with a consensus of 4.2% growth and $0.70.
- Software license/cloud subscription sales are expected to post 1%-11% growth in FQ3 after declining 1% in FQ2. Hardware product sales growth is expected to be in a range of -2% to +8%, better than FQ2's -3%.
- Oracle also notes its costly/high-margin engineered systems (Exadata, Exalytics, etc.) now account for 30% of hardware product revenue. Oracle needs engineered systems sales growth to remain healthy to offset slumping sales of traditional SPARC/UNIX systems.
- FQ2 results, details
Dec. 18, 2013, 4:29 PM
- Oracle's (ORCL) software license/cloud subscription sales (drives future services revenue) fell 1% Y/Y in FQ2 to $2.4B. That represents a reversal from FQ1's 4% growth, but is in-line with guidance of -6% to +4%. Hardware product sales fell 3% Y/Y to $714M, an improvement from FQ1's 14% drop and near the high end of a guidance range of -11% to -1%.
- License update/product support services revenue (49% of total revenue, tends to be fairly stable) rose 6% Y/Y vs. 7% in FQ1. Hardware support sales rose 4%.
- $2.8B was spent on buybacks, down slightly from FQ1's $3B but still doing much to strengthen EPS. Opex rose 4% Y/Y, even with FQ1. Sales/marketing spend +11% to $2B, R&D +6% to $1.3B.
- Americas revenue (54% of total) +4% Y/Y, even with FQ1. EMEA +4%, up from FQ1's +2%. Asia-Pac remains weak, sales -9% vs. -4%. Cisco and others have reported seeing NSA-related challenges in China.
- Larry Ellison says cloud/SaaS software bookings rose 35% Y/Y. That suggests bookings for on-premise software declined meaningfully.
- CC at 5PM ET, guidance should be provided. FQ2 results, PR.
Dec. 18, 2013, 4:06 PM
Dec. 18, 2013, 12:10 AM
Dec. 18, 2013, 12:02 AM
- Ahead of Oracle's (ORCL) FQ2 report (due after Wednesday's close), JMP's Pat Walravens reports the enterprise software giant is set to carry out a U.S. sales force reorg, and may restructure its struggling hardware ops.
- Walravens also expects Oracle to announce H-P is renewing its Oracle software licenses for $150M. H-P and Oracle haven't been on the best of terms lately.
- Back in July, Walravens reported many tenured Oracle sales personnel had left, and BI reported of frustration within Oracle's salesforce about hardware quotas. In response to the reports, some SA commenters claiming to be ex-Oracle employees aired complaints about the company. Shortly afterwards, senior North American sales exec Anthony Fernicola left for Salesforce.
- Oracle is coming off three straight quarters of revenue misses, and concerns about both its software license and hardware sales have mounted amid growing cloud software competition and server share loss. Oracle has guided for FQ2 license/cloud subscription revenue growth of -6% to +4% Y/Y, and hardware product growth of -11% to -1%.
- With shares having missed out on this year's big tech rally, some bad news is priced in.
Dec. 17, 2013, 5:35 PM
Dec. 12, 2013, 4:13 PM
- Beauty products giant Avon (AVP -1.3%) expects to take a $100M-$125M charge related to the failed rollout of an SAP-based (SAP -0.6%) order management software system. The WSJ states the system was "so burdensome and disruptive to Avon representatives' daily routine that they left in meaningful numbers."
- As Steve Rosenbush notes, Avon's decision, and the employee backlash that triggered it, shines a light on how corporate workers are increasingly demanding the business apps they use be as intuitive and user-friendly as the consumer apps they rely upon.
- This trend, which ties into the "consumerization" of IT, poses a challenge to traditional enterprise software giants such as SAP, Oracle (ORCL), and IBM, and often works to the benefit of enterprise cloud software providers whose offerings emphasize ease-of-use and flexibility over the richest possible feature set.
Dec. 12, 2013, 7:17 AM
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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