Friday, June 21, 2013

Oracle Q4 Takeaways

Kudos to Oracle for putting a great spin last night on reporting rather "rough" Q4 results. Confession: when I listened to Safra's guidance for Q4 (given on the Q3 call earlier this year), I thought she was "sandbagging" with a strategy of beating that guidance to smithereens with strong Q4 results. Now I'm wondering if Safra would take some time off to help me pick winning ponies at the Del Mar track...if she's as good with picking winning horses, I could end that day as a rich man. 

Getting into the product and tech aspects of last evening's call, I took a few impressions away: 

1. With the exception of SaaS, the enterprise applications market as we know it is finally shriveling up and dieing. It'll be a drawn-out process, but I don't expect to see significant net new sales growth in traditional, on-premise ERP again...ever. 

2. Oracle's SaaS play, while insignificant at this time in terms on the overall contribution to the Oracle portfolio, is gaining momentum. The rub is that, while Oracle can emulate the multi-tenant experience for a customer, it's not true multi-tenant...the financial scaling falls short of potential for buyer and seller. The new 12c database is going to change all of that. I suspect that next week's Cloud SaaS partnership announcements will revolve around the capabilities of the upcoming 12c database. So the success of Oracle's move to the cloud strategy rests on the technical performance of the 12c database. So it darn well better work as advertised. Given Oracle's background and past performance with databases, I don't see much potential for problems here. 

3. Forget the traditional "just install the software" approach. Big data and internal clouds will be running on engineered systems (Exa[insert marketing product name here]: Exadata, ExaLogic, ExaAnalytics, ExaTaxi, ExaSugarCookies...you get the idea. The only hardware play for Oracle (and soon, for anybody else in the big hardware space) will be hardware as a component of a fully-integrated, engineered, turn-key system. 

4. The terms "Fusion" is quietly going away. Probably be gone by Oracle OpenWorld 2013. Think "Cloud Applications". And this just is not rebranding, but a change in perspective. Rather than selling ERP modules and suites, you'll see Oracle shift to the concept of selling "best of breed" SaaS and hosted point solutions that can be integrated into whatever you already have. Personally, I see this as a move in the right direction. It's not there yet (remember, Oracle turns like a barge - not like a speed boat), but it's a significant move in the right direction of simple, lightweight apps. 

5. Oracle is in a huge transition phase - don't look for huge growth until they execute on delivering both true SaaS and engineered systems. We'll be out of the woods when we see some momentum in net new sales for both areas. In the meantime, the ride could get a bit bumpy. 

I absorbed a bunch of interesting information about financial trends as well, but I doubt many of you are into that sort of stuff. If you are, google it up - it's all over the web today. In the end, we're all prognosticators. So what did you get out of Oracle's Q4 results. Hit the comments and share...

2 comments:

Frank Scavo said...

Floyd, excellent post, as usual. Just one suggestion.

Two words: paragraph breaks

fteter said...

@Frank Scavo: Fixed. Stupid mobile blogging tools...