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
Dec. 6, 2013, 6:41 PM
- IDC estimates server sales fell 3.7% Y/Y in Q3. That's a modest improvement from Q2's estimated 6.2% drop, but hardly a figure that will bring cheer to industry players. Gartner estimates revenue fell 2.1% in Q3 vs. 3.8% in Q2.
- The embrace by Web/cloud giants of home-grown servers produced by Asian contract manufacturers (ODMs) continues to upend the industry. IDC thinks sales of such servers rose 45% Y/Y, and now make up 6.5% of industry revenue. It estimates nearly 4/5 of these sales came from the U.S., largely from Google, Facebook, Amazon, and Rackspace.
- #1 H-P (HPQ), which recently reported encouraing enterprise hardware numbers, is assigned a 28.1% share (+150 bps Y/Y) by IDC. #2 IBM, whose total Q3 hardware sales fell 17% Y/Y, is given a 23.4% share (-430 bps).
- Newly-private Dell had a 16.2% share (-40 bps, a reversal from recent gains), Cisco (CSCO - still seeing strong UCS server demand) a 5% share (+170 bps), and Oracle (ORCL - hurt by SPARC/UNIX server weakness) a 4.1% share (-60 bps).
- In a positive for Intel (INTC), x86 servers took share once again, with sales rising 2.8% and making up 79% of industry revenue. Red Hat (RHT) is likely pleased to see Linux servers now make up 28% of industry revenue. Windows (MSFT) servers made up 50%, and UNIX servers just 11%.
- H-P is the leader in the x86 server market (32.3% share), as well as in the growing blade server (43.6%) and density-optimized server (30.7%) markets. There's a decent amount of overlap between the x86 and blade/density-optimized markets.
Nov. 18, 2013, 5:37 PM
- Oracle (ORCL) has acquired Bitzer Mobile, a developer of software tools that enable secure access to corporate apps/files on mobile devices by creating "lockers" within the devices that are shut off from other apps/files. Terms are undisclosed.
- Oracle asserts Bitzer's software will help it address the burgeoning bring-your-own-device (BYOD) trend. Rival VMware offers something similar through its Horizon Mobile Secure Workspace, and Samsung is looking to add secure app/file silos within its devices through its KNOX platform.
- Oracle's purchase comes shortly after IBM bought Fiberlink, a provider of mobile device management, app management, and security software.
Nov. 14, 2013, 10:13 AM
- The list of enterprise hardware/software, telecom equipment, and component/chip suppliers selling off (previous) due to Cisco's poor guidance and order data now includes Oracle (ORCL -2.4%), EZchip (EZCH -6.1%), Riverbed (RVBD -6%, shot higher yesterday on M&A hopes), NeoPhotonics (NPTN -6.6%), Ixia (XXIA -4.7%), Oclaro (OCLR -4%), Procera (PKT -2.3%), and Alliance Fiber (AFOP -3.8%).
- Cisco's weak service provider (-13% Y/Y) and emerging markets (-12%) orders are worrying investors in peers/suppliers, particularly given some peers (I, II) have also reported of soft carrier and/or EM demand. John Chambers' admission the NSA spying scandal has affected sales in China (orders -18%) also isn't going over well.
- However, many on the sell-side argue a big portion of Cisco's problems are tied to company-specific product issues.
- H-P (HPQ -5.6%), which has plenty of Chinese exposure, has added considerably to yesterday's AH losses, and so have Ciena (CIEN -5.3%) and Finisar (FNSR -10%). H-P's FQ4 report is due on Nov. 26, and Ciena's FQ4 report arrives on Dec. 12.
Oct. 31, 2013, 2:04 PM
- In a non-binding vote, Oracle (ORCL +0.5%) shareholders voted against proposed exec. compensation at the software giant's annual meeting. 2B+ votes were cast in opposition, and 1B+ were cast in favor.
- Complaints about Oracle's executive pay have been growing; advisory firm ISS recently recommended shareholders vote against 8 of the company's 11 directors, citing poor oversight with regards to compensation and other matters. Larry Ellison's pay (above $60M each of the last six fiscal year) has especially drawn a lot of heat.
- Nonetheless, a majority of votes were cast in support of Oracle's directors, including those on the compensation committee, in a separate non-binding vote.
Oct. 24, 2013, 10:55 AM
- A source close to Oracle (ORCL) tells BI the company paid "hundreds of millions" for cloud sales configure price quote (CPQ) software vendor BigMachines at a valuation of ~5x sales. With BigMachines reportedly set to produce 2013 sales of $100M (up from 2012's $58M), the price tag could be in the $400M-$500M range.
- BI observes half of BigMachines' customers are also customers of Oracle CRM software archrival Salesforce (CRM +1.9%), and that the startup's client base include major enterprises such as GE and H-P. Oracle already offers an on-premise CPQ solution, but (as with other CRM markets) demand is shifting towards cloud-based offerings.
- Salesforce invested in BigMachines last year, and more recently took a stake in rival cloud CPQ vendor Apttus. Much as it responded to Oracle-Eloqua by acquiring ExactTarget, Salesforce could turn its sights on buying Apttus or another BigMachines rival.
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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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