Were Oracle’s Q3 Results a Harbinger of a Fundamental Shift in Enterprise Database Purchasing Trends?

In article published in the March 22, 2013 edition of The Wall Street Journal, “New Rivals Clip Oracle’s Wings”, several wall street analysts present their opinions about the near term prospects for Oracle Corporation. We found several points of interest in the article.

Michael Hickins, who wrote the article with contribution by Rachel King, writes that “Safra Catz, Oracle’s co-president and chief cinancial officer blamed the sales miss on Oracle’s own miscues rather than underlying demand for its products.” But “Peter Goldmacher, who follows technology companies at investment manager Cowen and Co., said ‘there is a larger problem here’ than a one-quarter miscue. He noted that Oracle has had three disappointing quarters in the past two years . . . ‘new companies are offering equivalent or better functionality at a better price,’ he argued.”

Juxtaposing Catz’s comments with the quotes from Goldmacher lead us to doubt, at least the insight, if not the veracity of Catz’s comments from a skeptical position. But once we digested the whole article, we had to wonder if our reaction was not excessive. The drop in revenue only amounted to 2.3%, a miniscule difference for a large ISV with an annual revenue rate of $35Bil +. Why is this article leading us to this type of conclusion?

The answer is all about hyperbole. We attended the Bloomberg Big Data Conference last Thursday (seems like ages ago), on March 14, 2013. The observations on NoSQL “databases” (without rows or columns) in Mr. Hickens’ article, together with some of the conference commentary leads us to think that Wall Street analysts spending time tracking ISVs with Big Data solutions are on a hunt for the hackneyed “next big thing.”

But massive relational databases are very much like massive NoSQL “databases” (perhaps data libraries, or merely repositories would be a better term). The same type of tools are required to, once again, tag with metadata for browser, index and categorize based upon taxonomies.

We think the whole discussion is puffed up. Investors should exercise caution.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved

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