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.
Oct. 23, 2013, 12:09 PM
- Oracle (ORCL -1.3%) has acquired BigMachines, a developer of cloud-based software that automates the creation of complex price quotes for sales teams. Terms are undisclosed. (PR)
- BigMachines' software complements Oracle's existing cloud CRM software offerings, and represents an attempt to better compete against Salesforce (CRM -1.7%), whose mainstay Sales Cloud sales force automation platform has been rapidly taking share from Oracle (and SAP's) on-premise CRM apps.
- The purchase comes shortly after Oracle bought cloud content marketing software vendor Compendium. The purchase was the latest in a string of cloud marketing-related acquisitions by Oracle, which is competing in this space with Salesforce's Marketing Cloud, as well as offerings from SAP, Adobe, and IBM.
- Previous: Salesforce rises, Oracle falls in enterprise app survey
Oct. 22, 2013, 4:29 AM| 2 Comments
Oct. 17, 2013, 12:57 PM
- Oracle (ORCL -0.2%) has acquired Compendium, a developer of cloud-based tools for targeting, publishing, promoting, and monitoring marketing-themed content (blog posts, Facebook/Twitter updates, videos, etc.) for online/mobile platforms. Terms are undisclosed. (PR)
- Compendium's products, which leverage customer data/profiles to target content, will be integrated with recently-acquired Eloqua's cloud-based marketing automation platform for online campaigns.
- The Compendium and Eloqua acquisitions have followed the purchase of three social media marketing startups - Involver, Collective Intellect, and Vitrue. Oracle, Salesforce, SAP, and IBM have all been using M&A to help create end-to-end marketing software platforms aimed at CMOs, who are accounting for a growing share of IT spend.
Oct. 15, 2013, 5:05 PM
- Proxy advisory firm ISS recommends Oracle (ORCL -1.6%) investors vote against 8 of the company's 11 board members at its Oct. 31 annual meeting, arguing the board has failed to "provide effective oversight of management on behalf of shareholders" with regards to executive compensation and other matters.
- Larry Ellison ($41B estimated net worth) has already been drawing heat from shareholders over his steep pay. Ellison's compensation totaled $76.9M in FY13, and has steadily been above $60M over the last six fiscal years (it topped $80M in three of those years). Major shareholders Vanguard and CtW Investment are among the disgruntled parties.
Oct. 4, 2013, 7:34 PM
- Reuters reports Avaya, a top provider of telecom hardware/software for enterprises and contact centers, held buyout talks with Oracle (ORCL) earlier this year. However, the talks are said to have "fizzled" in recent months.
- Avaya was taken private by P-E firms TPG and Silver Lake for $8.4B in '07. The company has been struggling to deal with market saturation, competition from the likes of Cisco and Microsoft, and an industry shift towards hosted/cloud-based telecom services (RingCentral's IPO drives home the strength of that trend).
- Avaya's sales fell 7% Y/Y to $5.17B in FY12, and 8% to $1.15B in its most recent quarter. Thanks to its P-E owners, Avaya had $6.1B in debt at the end of March '13, and just $303M in cash. The company filed for an IPO back in 2011, but its plans have been on hold ever since.
- Buying Avaya would dramatically expand Oracle's enterprise hardware ops, which are contending with revenue declines of their own.
Oct. 4, 2013, 4:31 AM
- Oracle (ORCL) CEO Larry Ellison will forgo a potential payout of $500M in order to settle accusations of conflicts of interest in the company's 2011 purchase of Pillar Data Systems, a data-storage firm that Ellison controlled.
- Oracle originally agreed to pay for the acquisition based on Pillar's performance through 2014 but none up front. Ellison was to receive the first $562M of any payment connected to the deal, but he will now return 95% of any money he gets back to Oracle.
- The settlement comes after lawsuits from two shareholders, and amid criticism over Ellison's large salary.
Sep. 23, 2013, 11:17 AM
- Back from the America's Cup, Larry Ellison (ORCL -0.6%) was his usual self during an Oracle OpenWorld speech, trash-talking rivals and promising upcoming Oracle products will blow away existing offerings.
- Grabbing the most headlines: Ellison's boast that an expected in-memory version of Oracle's flagship 12c database will improve analytics query speeds by 100x, and transaction-processing rates by 2x, over a standard relational database. Ellison also stated customers will have to "just flip a switch" to turn a regular 12c database into an in-memory database.
- The product is aimed squarely at archrival SAP (SAP -0.2%), whose market-leading Hana in-memory database is expected to post 2013 sales of €650M-€700M (that's up from 2012's €392M, but some think the figures are inflated). Though not applicable to all traditional database deployments, Hana is viewed as a long-term threat to Oracle's database cash-cow.
- SAP has been busy expanding Hana's reach this year, adding support for its core Business Suite apps, expanding 3rd-party app support, and launching a Hana managed cloud service for migrating on-premise SAP apps.
- Ellison also promised Oracle will launch a new high-end server, known as the M6-32 Big Memory Machine, for in-memory deployments; the server will support up to 32TB of RAM, and cost a hefty $3M. Oracle's hardware product sales fell 14% Y/Y in the Aug. quarter, easily missing guidance.
- Also on tap: a database backup appliance and a related cloud backup/recovery service. By constantly receiving database logs and supporting restores to any log points, Ellison asserts the appliance is a better solution for databases than standard backup systems.
Sep. 22, 2013, 3:24 PM
- Gartner estimates that by 2017, the largest portion of corporate IT spend will be controlled by chief marketing officers (CMOs) rather than CIOs. CLSA's Ed Maguire views cloud CRM software kingpin Salesforce (CRM) as a major beneficiary of this trend, particularly following its $2.5B deal to acquire ExactTarget. Salesforce is adding ExactTarget's marketing automation software to its growing Marketing Cloud platform.
- Other ad software/tech names that benefit from a spending shift to CMOs include Adobe (ADBE), Responsys (MKTG), Marketo (MKTO), Constant Contact (CTCT), and Marin Software (MRIN). Adobe's own Marketing Cloud saw 28% Y/Y sales growth in the August quarter, and was recently bolstered by the $600M purchase of ad campaign software vendor Neolane.
- Like Salesforce, SAP is trying to create an end-to-end CRM platform aimed at CMOs. It recently bought top e-commerce software firm hybris for a reported $1.2B-$1.5B.
- Maguire also states Salesforce's data integration deal with Workday (WDAY), together with a prior deal with Oracle (ORCL), "reinforce [Salesforce's] prominence as a de facto CRM standard." He reports hearing of "at least one competitive engagement where a customer chose Oracle over Workday" because the latter's Salesforce integration wasn't good enough.
- Nomura feels likewise about Salesforce, and thinks its deals help negate the historical edge SAP has had in app integration (courtesy of its own apps, rather than partnerships). With two key ERP/HR software rivals striking deals with Salesforce, SAP is on the spot to strike one of its own.
Sep. 18, 2013, 5:22 PM
- Oracle (ORCL) guides on its FQ1 CC (webcast) for FQ2 revenue growth of -1% to +2% Y/Y and EPS of $0.64-$0.69. That's largely below a consensus of 3.2% and $0.69.
- FQ2 software license/cloud subscription revenue growth is expected to be in a range of -6% to +4% Y/Y, and hardware product growth in a range of -11% to -1%. Those ranges compare with FQ1 growth of +4% and -14%, respectively.
- CFO Safra Catz claims Oracle is optimistic about deal opportunities and the impact of new products, but adds sales leaders are being "very careful" about their forecasts in light of macro/business conditions.
- Oracle has already posted disappointing license growth more than once this year. That, in turn, has stoked fears of share losses to cloud software firms.
- Larry Ellison has skipped the CC to take part in the America's Cup.
- FQ1 results, details
Sep. 18, 2013, 4:28 PM
- Oracle's (ORCL) software license/cloud subscription revenue rose 4% Y/Y in FQ1 to $1.66B. The growth rate is better than FQ4's disappointing 1%, and hit a guidance range of -1% to +7%. But hardware product sales fell 14% Y/Y to $669M, missing a guidance range of -6% to +2%. 60% engineered system sales growth apparently failed to offset plunging SPARC/UNIX server sales.
- Software license update/product support revenue (flows from existing license deals) rose 7% Y/Y to $4.43B, up from 6% in FQ4.
- $3B was spent on buybacks, up from FQ4's $2.8B and allowing EPS to beat estimates in spite of a revenue miss.
- Americas sales rose 4% Y/Y to $4.52B, aided by 14% growth in software licenses/cloud subscriptions. EMEA +2% to $2.44B, but with a 4% license/subscription drop. Thanks in large part to forex, Asia-Pac revenue -4% to $1.42B, licenses/subscriptions -5%.
- Opex +4% Y/Y, outpacing rev. growth of 2%. An 11% increase in sales/marketing spend to $1.71B offset lower G&A and hardware-related expenses.
- ORCL +0.8% AH. CC at 5PM ET, guidance should be provided.
- FQ1 results, PR
Sep. 18, 2013, 4:03 PM
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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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