Oracle's poor performance

Absrtact: Tencent Science and Technology (Tom) Beijing time March 22 news, according to foreign media reports, Oracle's stable profitability over the past decade has been one of the topics that Silicon Valley analysts relish. But in recent years, with the constant influx of big and small rivals, and

Tencent Science and Technology (Tom) Beijing time March 22 news, according to foreign media reports, Oracle's stable profitability over the past decade has been one of the topics that Silicon Valley analysts relish. But in recent years, Oracle has released three disappointing performance figures over the past two years, as its size rivals have poured in and customers have become increasingly sensitive to software prices. Moreover, some analysts say the situation is unlikely to improve in the short term.

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If there has been any change in Silicon Valley over the past decade, the continued profitability of Oracle is clearly one of them. But now, the situation is likely to usher in a change.

Poor performance

Oracle is still one of the most dominant companies in the technology industry, with a revenue of $32.7 billion trillion, and its databases and software applications are widely used by large enterprises to manage their own financial and procurement processes. But now, the company's position is being weakened by smaller companies that have more new technology and focus on research and development in one area.

The company, which is headquartered in Red Wood City, San Francisco, has released its third-quarter earnings report, which shows that Oracle's new software sales and Internet-type software subscription revenues fell 2% to $2.3 billion a year earlier than expected. Oracle's share price fell 9.7% per cent in Thursday, at $32.2 a share, its biggest decline since December 2011.

Safra Catz, the Oracle's co-founder and chief financial officer, blamed the company's poor performance on Savera sales opportunities rather than the decline in customer demand for the company's products. "The company's newly recruited salespeople are more willing to sign some of the agreed sales agreements by the fourth quarter to May, as sales performance at the end of the fiscal year will directly affect their commission," Katz said.

Oracle declined to comment more on the matter.

Peter Goldmacher, a marketing research firm Cowen & Co, who focuses on research technology companies, said: "Oracle's problem is far more than a fiscal quarter's performance mistake, because in the last two years, Oracle has seen three disappointing performances. While Oracle is still the top of the software installation base, start-ups are offering similar, even better products at more favorable prices. ”

Fierce competition

The Oracle, founded by Larry Ellison, the company's chief executive, is still the world's largest provider of Ellison, but the so-called "big Data software" market is growing at three times times the pace of the overall market. "The growth of the big data market is expected to reach 150% in the next five years, while the global database market is growing at 40%," said David Floyer, Wikibon co-founder of the long-term analyst and online technology research community in the Data center field. ”

More and more companies are embracing the idea of "cheap-use technology", even though some of the biggest technology companies have begun to accept cloud computing technology that requires only subscription fees, without paying software fees. For example, some companies are starting to use database technology based on Hadoop frameworks and free data management software developed by Yahoo, Google (micro-blogging) engineers.

Dave Corchado, chief information officer of Icrossing, a digital marketing agency for Oracle, said: "Part of the company's IT spending has begun to flow to rivals such as Amazon Oracle." Icrossing is currently using Amazon's computer hosting service and the Free analytics software for Hadoop, but the company is still targeting Oracle in its database, and the company intends to keep it. ”

NuStar Energy Group chief information Officer Manrish-Capono (Manish Kapoor) said in an e-mail that his company has abandoned Oracle's database products on the basis of cost considerations. "Database software has become a commodity transaction, and this area is full of competition." If we use Oracle database, the company will be more inclined to use Oracle's other software products. "said Capono.

Aetna, the US insurance giant, had been looking for software that could analyze data for up to 18 million of its clients, and it had not considered big companies such as Oracle, which had gained prominence. Michael Palmer, head of Aetna's innovation department, said: "Old data-analysis software providers are slow to respond to rapid market changes like the GNS healthcare start-ups." ”

It is important to note that companies, including Workday and Salesforce.com, also offer software that directly competes with Oracle's core products, especially those used to manage enterprise human resources and sales management, and the price of the former is much lower than that of Oracle. For example, the monthly cost per user for a one-year contract for Salesforce.com Software is $125, while Oracle software's per-user monthly cost is as high as thousands of dollars, and the latter is mandatory for the minimum and annual fees.

Other threats

Oracle, of course, has not overlooked the changing trend in technology software prices. Oracle has acquired RightNow Technologies Inc, Taleo Corp. and Eloqua Inc. since October 2011, with a total acquisition of $4.3 billion trillion.

In this respect, Rebecca Wettemann, an analyst at Nucleus Research, a marketing agency, said: "Most of these companies ' clients are marketing executives, not CIOs, who are often more willing to work with independent cloud providers, Oracle is famous for its "difficult communication" in the industry. ”

The shares of workday, which was IPOs last October, closed at $61.11 in Thursday, up 27% per cent in local time. Meanwhile, Salesforce local time in Thursday, the share price closed at 172.73 U.S. dollars, in the past six months, the cumulative rise of 11%.

Oracle has pioneered a "relational database" 30 years ago (relational database, a database based on relational database models, with concepts and methods such as set algebra to handle data in a database). With this technology, the company has almost ruled the database market for 30 years. But now, a low-cost, NoSQL database called "the" is starting to gain popularity among companies, including Facebook and AutoZone, which are using the database.

It is worth mentioning that many other companies are now using NoSQL databases to store and analyze fragmented information such as e-mail, call center conversations, and Twitter information. At the same time, the database could help retailers better understand consumer demand, or help banks use public information to analyze financial trends, which governments do not normally disclose in official data.