Oracle: what is going on?

How come Oracle missed the second consecutive quarter "on disappointing" revenues?


The Internet and media are full of "logical" explanations: Analyst  Brad Reback writes:
“Given [this was] Oracle; second consecutive miss, we believe many investors will question if there are other forces at work besides the macro [business environment] and if Oracle is losing its relevance to newer technologies.
He then brushes off his own conclusion. Reback holds a buy rating and $37-a-share target price on Oracle’s stock.

Really?

In Sept 2011, almost two years ago, Marc Andreesen  said Oracle is doomed:  "not a single one of Andreessen-Horowitz's startup investments use Oracle"
Cloud computing has lowered costs so dramatically, it's made huge success stories like Facebook possible. "Ten years ago, Facebook wouldn't have been viable as a company or a business. The infrastructure costs wouldn't have worked. The checks to Oracle, Sun, BEA, and EMC would have crushed the company before it ever got off the ground."
 "I think the clock is really ticking and Oracle is the most vivid case. I have huge respect for Oracle, Larry Ellison is one of my idols -- I wouldn't quite say role model....But objectively looking where they are, they have all the old software, they've cranked up the maintenance fees. That's all well and good for customers that model, but they have not leaped forward into this change."
As an ex Sun employee, I saw how Oracle took all what it appeared the cream of Sun and wasted away anything not useful short term.

Anything on cloud computing is much more economical to run than paying enterprise licenses to Oracle. If you are curious, see the current Oracle price lists here.

For example Transportation Management license is $16,100 plus  $3,542.00  for each 1$M Freight Under Management  with a minimum of $25M., this  is a a minimum of $104,650 per year. If you add options it shots to $500,000 per year plus easily for $100M

Even MySQL supposedly an open source program , is charged as "MySQL Cluster Carrier Grade Edition Subscription (5+ socket server) at $20,000 per year per server..

This is very simple: Oracle will not be able to build a cloud business without eroding it's own mighty enterprise software  revenues. And in transition to cloud, there are so many other players more powerful than Oracle.

All these alliances with Microsoft and Sales.com come a little late. And who is going to fix this?  A CEO who lost the sense of humility, with not enough hunger as he is super-rich? Huge egos make most intelligent humans loose their prophecy gift.  He is surrounded by "Yes" executives, all decisions are top-down. As reported by my ex-colleagues who worked for a while in Oracle, to buy a laptop requires approval from the office of  Executive VP Safra Katz.

Some inevitable change is about to come, sooner or later and a temporary jump of the stock at $37 as predicted by  Brad Reback will not last, unless the very structure of Oracle changes miraculously.

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