Advertisement
Promo

Online business Toolkit

What ails Oracle?

Mike Ricciuti CNET News

Published: 17 Sep 2004 15:30 BST

  • Email
  • Trackback
  • Clip Link
  • Print friendly
  • Post Comment

Is Oracle's recent slowdown in the applications business a one-time fluke or just the latest setback in a troublesome area for the software maker?

On Tuesday the company reported good news and bad news: Database sales, which make up more than 80 percent of Oracle's business, are booming, up 18 percent versus one year ago. But Oracle executives said sales of their business applications software plummeted last quarter, down 36 percent compared with one year ago. With sales of only $69m (£38m), it was Oracle's weakest quarterly sales of applications in more than 5 years.

Oracle's chief financial officer, Harry You, dismissed concerns about weakness in Oracle's applications business overall. And during the company's quarterly conference call on Tuesday, Oracle executives deflected questions over whether the ongoing PeopleSoft takeover attempt has become a distraction. "I urge people not to get... misled. It's not as if it is a serious negative situation in our view, because we expect growth for the year," You told analysts.

One reason cited by Oracle for the big percentage drop in application sales this quarter, as compared with the same period last year, is a $30m deal the company inked last year in Russia. Excluding that deal, Oracle's applications sales declined by 11 percent. "Either way, we have work to do," You said.

Analysts were less optimistic. Oracle's application sales were "abysmal" and "well short of... even the most pessimistic estimates", according to JP Morgan analyst Adam Holt. If anything, the shortfall continues a downward trend. In July, Oracle reported that its applications business declined by 6 percent during the past year, even though analysts had projected growth of 10 percent.

To bolster its applications business -- and drive greater database and maintenance revenue -- Oracle launched a hostile bid for rival PeopleSoft more than a year ago. The company earlier this month won a victory against the Justice Department, which opposed the deal in an antitrust trial in a US District Court in San Francisco.

But that victory -- just one step in a long and ongoing process -- has come at a price, said Josh Greenbaum, an analyst with Enterprise Applications Consulting. "The irony of this whole takeover attempt is that Oracle hasn't been minding its own applications business; they've let that slip. Fundamentally, they haven't put the effort into applications that they've put into databases and technology."

Oracle executives deny that the PeopleSoft deal has hurt business. But there's some evidence that the battle has hurt Oracle on the public-opinion front. A recent survey indicated that technology buyers' opinion of Oracle is at its lowest level in 12 years and is deteriorating.

Next

Previous

1 2 3


  • Email
  • Trackback
  • Clip Link
  • Print friendlyPrint with EPSON

Did you find this article useful?
209 out of 407 people found this useful


Full Talkback thread

0 comments

Company/Topic Alerts

Create a new alert from the list below:







Sentry Posts Blog

Motorola Droid Drops Today: Happy Droi...

Motorola Droid Drops Today: Happy Droid Day America! Author: Eric Everson, Mobile Security Expert If you’re wondering what all of the buzz is about with words like Droid and Android... More

Post a comment

Mobile Security Profile: BlackBerry St...

Mobile Security Profile: BlackBerry Storm2 Author: Eric Everson BlackBerry handsets are a staple of office culture; from syncing calendars to sharing business-related data,... More

Post a comment

South Korea plans to fingerprint visit...

The South Korean authorities could fingerprint and photograph foreign visitors from 2012, the Korea Times reported on Tuesday. Barring diplomats and government operatives, all visitors... More

Post a comment

Video icon

Video

Google Chrome

Roundup: Full coverage of Google Chrome

The search giant has launched a beta of its own open-source browser, sending a clear challenge to Microsoft in the way it lets users work with applications More

Blog: Google Chrome has Microsoft's code inside, says MS manager

And furthermore, he says, that's a good thing... More

Blog: Google Chrome — nine things we've found since launch

Google must be very happy with the coverage Chrome has gathered. But it's not all good news... More


Skip Sub Navigation Links to CNET Brand Links

Help

Become part of the ZDNet community.

Newsletters