Apr. 14, 2014, 7:07 PM
- An April Barclays survey of 100 U.S. and European CIOs found 46% expecting their company's IT spending to rise in 1H14, 20% expecting it to drop, and 34% expecting no change. Those figures compare with September survey levels of 43%, 27%, and 30%.
- Moreover, IT spending growth is seen accelerating in 2H in both the U.S. and Europe. Barclays thinks larger budgets, macro stabilization, and a need for equipment refreshes (due to high utilization rates) could be helping out.
- At the same time, the firm cautions the spending growth is uneven: Software, networking, security, and cloud services demand is healthy, but servers, storage, and IT services remain soft. Interest in the concept of a software-defined data center is gaining traction, but big data (hyped considerably last year) is losing it for now.
- Gartner has forecast IT spending will rise 3.2% this year to $3.77T after growing just 0.4% in 2013. Enterprise software (+6.9% to $320B) is expected to lead the way.
- Barclays thinks its survey bodes well for H-P (HPQ), Juniper (JNPR), F5 (FFIV), Aruba (ARUN), Ingram Micro (IM), and CDW, each of which is rated Overweight.
- Others that might take heart in the survey results: CSCO, ORCL, SAP, CA, SWI, VMW, CHKP, BRCD, ARW, AVT
Apr. 11, 2014, 5:37 PM
Mar. 27, 2014, 3:45 AM
- CEO salaries at companies that generate over $8B in revenues rose 4.1% to a median $9.8M in 2013 as shareholder activism kept a lid on pay, a WSJ-commissioned survey shows.
- While the increase was slightly greater than in 2012, it was well well under the median 25% shareholder return for the companies looked at.
- Clarence Otis of Darden Restaurants (DRI), which is a focus of investor activism, saw his pay drop 24% even as returns increased 4%, and while the compensation of Cisco's (CSCO) John Chambers jumped 49%, returns soared 65%. GameStop's (GME) Paul Raines enjoyed a 92% boost in his salary even though returns rose just 5.4%.
- Other relevant tickers: BBBY, ORCL, NKE, VIAB
Mar. 19, 2014, 2:30 PM
- Though Venezuelan forex issues and the ongoing shift to cloud subscriptions from up-front licenses pressured Oracle's (ORCL -0.4%) FQ3 results, the software giant's quarter was "solid across-the-board," thinks Stifel's Brad Reback (Buy), upping his PT to $43 from $40.
- Reback notes Oracle's cloud bookings rose 60% Y/Y (exceeding rev. growth of 24%), and that engineered systems now account for nearly a third of hardware product sales. He also thinks the company has addressed many of its recent sales execution issues.
- "Not great, but getting better" is how Nomura's Rick Sherlund (Buy) refers to the quarter. He's slightly raising his estimates, and sees Oracle posting 4% revenue growth and 8%-10% EPS growth in FY15 (ends May '15).
- Morgan Stanley's Keith Weiss (Equal-Weight) is less enthusiastic, arguing Oracle's 1% Y/Y software billings growth "against the easiest comps of the year brings into question the achievability of [FQ4] targets near-term, and competitive positioning longer-term." He adds Oracle needs to "consistently expand margins" to deliver sustainable 10% EPS growth.
- CC transcript, more on Oracle
Mar. 18, 2014, 5:45 PM
Mar. 18, 2014, 5:24 PM
- Oracle (ORCL) guides on its FQ3 CC for FQ4 revenue growth of 3%-7% and EPS of $0.92-$0.99, in-line with a consensus for 5.1% growth and EPS of $0.96.
- New software license/cloud subscription sales are expected to grow 0%-10% vs. 4% in FQ3. Hardware product sales are also expected to grow 0%-10%; FQ3 growth was 8%.
- Asia-Pac remains a weak spot for Oracle: Sales fell 6% Y/Y in FQ3 to $1.43B. But Americas sales rose 5% to $4.95B, and EMEA sales 6% to $2.92B.
- Excluding forex, cloud software subscription sales (boosted by acquisitions) rose 25% Y/Y, and engineered system sales rose 30%.
- Shares have slightly pared their AH losses.
- FQ3 results, details
Mar. 18, 2014, 4:26 PM
- Oracle's (ORCL) new software license/cloud subscription revenue (boosted some by M&A) rose 4% Y/Y in FQ3 to $2.4B; that's in-line with a guidance range of 1%-11%, and better than FQ2's 1% decline. Hardware product sales rose 8% Y/Y, at the high end of a guidance range of -2% to +8% and better than FQ2's -3%.
- License update/product support revenue (fairly stable) rose 5% Y/Y to $4.6B (49% of revenue) after growing 6% in FQ2. Hardware support revenue +5% vs. +4%, services -4% vs. -6%.
- Opex rose only 2% Y/Y, down from FQ2's 4% clip; Wedbush had reported hearing of bonus cuts. Sales/marketing spend rose 7%, and R&D 9%, but G&A fell 3%.
- $2B was spent on buybacks, down from $2.8B in FQ2.
- CC at 5PM ET, guidance should be provided.
- FQ3 results, PR
Mar. 18, 2014, 4:07 PM
Mar. 18, 2014, 12:10 AM
Mar. 17, 2014, 6:55 PM
- "Our checks suggest FY13 bonuses were trimmed or eliminated for many employees across the company," says Wedbush's Steve Koenig (Neutral) ahead of Oracle's (ORCL) Tuesday FQ3 report. He sees the move boding well for the software giant's bottom line, but not so much for its "ability to attract and retain talent."
- Koenig expects Oracle to beat consensus on the back of healthy sales of its flagship 12c database. 12c, launched last year, added the ability to simultaneously support multiple cloud tenants, and also comes with an in-memory option meant to compete against SAP's fast-growing Hana.
- At the same time, he thinks Oracle's cloud software acquisitions have been a mixed bag. Though Koenig has heard RightNow (customer support software, bought for $1.5B) is faring well, he doesn't think Taleo (talent management software, bought for $1.9B) is doing so.
- Oracle, pressured by the direct impact of cloud software competition and the indirect impact of cloud infrastructure platforms leveraging rival databases, posted a string of disappointing license/cloud subscription figures last year. But the company managed to deliver an in-line number for FQ2.
Mar. 17, 2014, 5:35 PM
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."
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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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