On the Scene: Oracle OpenWorld 2007

The company wows its users with new products and new plans for the future.

Even amid the late-year flurry of trade shows, user conferences, and product launches, Oracle OpenWorld has grown to a monstrous size -- 43,000 attendees piled into San Francisco's Moscone Center and snarled city traffic, much to the chagrin of the locals twittering (and Twittering) about their displeasure.

Oracle President Charles Phillips' keynote made clear the theme of nostalgia that ran through this year's event, which marked the 30th anniversary of the founding of the firm that would one day become Oracle. Phillips also struck the "innovation" note early and often: "Our history of innovation is something that really speaks to the essence of what this company has become," he told the crowd, before coining a phrase to embody Oracle's company-purchasing frenzy over the last four years: "Acquired Innovation."

Phillips broke down Oracle's operations into what he called its three major businesses:

* Databases: Phillips reiterated Oracle's stranglehold on the database marketplace, noting not just that Oracle had 47 percent of the market, but that its share was more than the next two closest competitors combined.
* Middleware: Oracle's a "Leader" in more than a dozen of Gartner's Magic Quadrant assessments of various middleware components. (Notably, Phillips made no mention of Oracle's as-yet-unsuccessful attempt to acquire middleware competitor BEA Systems.)
* Applications: The next stage for Oracle is "to go beyond just ERP and CRM," Phillips said. "Now we're adding many more capabilities going beyond that...with applications specific to [industries]. That's a new change in our strategy."

Oracle's innovations go beyond the software itself, Phillips said. "We also innovate with our business model," he said. "'Innovation' is not just products, but it's also how you go to market, how you bring more capabilities to the customer. Given where we are at this point in history in our industry, acquisitions make a lot more sense." Phillips took special note of the 41 acquisitions Oracle has made in the last 45 months: "Companies are a lot more proven [and have] a lot more customers, the products are seasoned -- and they're actually cheaper [in the post-dot-com-bust era]. So we decided to start bringing innovation to market, supplementing our internal development -- which is about $2 billion a year -- with acquired research and development," he said.

"Given who we are, and our size, and this well-known strategy now that includes acquisitions, anyone remotely thinking about selling their company is going to come to us with their enterprise software business. Given the state of the financial markets and the traditional IPO market, we've become the IPO market for the enterprise software industry."

Oracle, though, remains a discerning shopper when it comes to doing deals, Phillips said: "For every one we do, there's another hundred that we don't do." His address coincided almost in real time with IBM's announced acquisition of business intelligence (BI) vendor Cognos, effectively closing out the wave of top-tier BI consolidation that began in early 2007 with Oracle's deal for Hyperion Solutions.

Other big-ticket items launched or introduced at OpenWorld included Oracle Application Integration Architecture 2.0; Fusion Middleware (which Phillips characterized as "being in beta now"); Enterprise Manager 11g (another beta-stage element); My Oracle Support; Oracle VM (a tool targeting the much-buzzed-about trend toward virtualization); and the unveiling of the first three Fusion Applications -- all three of which (Sales Prospector, Sales References, Sales Tools) are for the sales force, and are loaded with Web 2.0 technology.

While many of these announcements sparked a buzz on the floor, James Kobielus, principal analyst for data management at Current Analysis, says he's unmoved. "Oracle primarily offered a grab bag of incremental announcements related to strategies and product releases that had already [been] pre-announced earlier in the year," he said, in a written note.

Author: Joshua Weinberger @ www.destinationcrm.com

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Leading Research Firm Recognizes Oracle as Leader in Worldwide Embedded Database Management System Vendor Share

According to market research firm IDC, Oracle is the overall leader in the worldwide embedded database management system (DBMS) software sector.

IDC states in its latest report, "Worldwide Embedded DBMS 2007-2011 Forecast and 2006 Vendor Shares," that Oracle's 23.2 percent of worldwide embedded DBMS software revenue by vendor surpasses the next closest vendor with 14.1 percent. Additionally, IDC notes that Oracle achieved an annual growth rate of 23.3 percent, almost double the 11.7 percent growth rate for the industry as a whole. IDC defines embedded DBMSs as database management systems sold to independent software vendors and used as components within larger software or hardware products. IDC also notes that embedded DBMSs are typically optimized for performance and small footprint and have management functions that are handled automatically by either the database or application.

"As the world market leading provider of relational DBMS software, Oracle has been increasing its attention in the embedded DBMS market in recent years," said Carl W. Olofson, Research Vice President Application Development and Deployment, IDC. "From 2004-2006, Oracle showed strong revenue growth in its embedded DBMS products. As they continue with strong investments in this space, large RDBMS vendors such as Oracle are likely to continue to grow ahead of the market during the next five years."

"Oracle sees a growing need for databases that are embedded within our partners' applications and devices, running in the data center, in the network, at the edge and in the mobile environment," said Rex Wang, vice president Embedded Systems Marketing, Oracle. "By embedding Oracle databases, partners can deliver more complete solutions faster and at lower cost. Oracle is fully committed to serving the needs of embedded
developers."

Oracle offers developers building embedded systems the industry's broadest selection of world-class embeddable database products to meet their specific application requirements, including:

-- Oracle Database -- for advanced relational database features in an
embeddable package;
-- Oracle TimesTen -- for real-time, in-memory relational data management
and caching;
-- Oracle Berkeley DB -- for high performance, non-relational data
management; and
-- Oracle Database Lite -- for online/offline mobile relational data
management.

Requiring virtually no human administration, these products are ideal for developers in industries such as telecommunications and high technology, which have demanding requirements for intelligent edge devices and services.

For a complimentary copy of IDC's "Worldwide Embedded DBMS 2007-2011 Forecast and 2006 Vendor Shares" report, visit:
http://www.oracle.com/corporate/analyst/reports/infrastructure/dbms/idc-209653.pdf

Source: www.prnewswire.com

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Oracle Hangs a Solid Q2 on a Thick Neck

Positive second-quarter earnings can be attributed largely to Oracle's acquisition strategy—42 companies in less than four years—and customer demand for "one throat to choke."

Oracle surprised Wall Street analysts and investors Dec. 20 by reporting better than expected fiscal second-quarter 2008 earnings, particularly in the area of software license revenue, much of which can be attributed to the fact that its acquisition strategy is finally paying off.

Oracle announced Dec. 20 that its earnings were up 35 percent to $1.3 billion and revenues were up 28 percent to $5.3 billion. Even more telling for Oracle's acquisition strategy, whidh has seen the company acquire 42 companies in just about as many months, software license revenues were up 29 percent to $4.2 billion, while new software license revenues were up 38 percent to $1.7 billion.

"The strength of the quarter comes down to the fact that we are selling more products to more customers in more industries," said Oracle Chief Financial Officer Safra Catz during the company's second-quarter conference call with analysts.

It is a sign, analysts and customers said, that buyers are looking for a single vendor—one throat to choke.

"Regardless of role, all the companies seem to appreciate the potential upside of the Oracle strategy," Bill Swanton and Lee Geishecker of AMR Research said in a November research note titled, "Oracle's Application Strategy—What's Your Five-Year Plan?"

"In fact, once Oracle accounts for over half of their enterprise applications footprint, most companies adopt an Oracle-first policy of seeing if Oracle's product meets their needs before investigating other vendors. They like the idea of single-vendor responsibility," Swanton and Geishecker wrote.

In its "Midsize Enterprise ERP Spending Report, 2007-2008," AMR Research found that 48 percent of midsized companies will increase their enterprise resource planning budgets by an average of 5.1 percent in 2008. That increase in spending will be driven in part by a desire to have a broad spectrum of functionality delivered from a single software vendor, the report said—a finding that ties nicely into the acquisitions that Oracle has been making.

In a Dec. 19 research note, Goldman Sachs analysts Sarah Friar, Derek Bingham and Frederick Grieb wrote that Oracle turned in a "highly impressive" second fiscal quarter, beating estimates on both applications and technology revenues. The reason, they said, is Oracle's acquisition strategy is paying off.

"Oracle continues to execute on its consolidation strategy, which has afforded it an expansive product set, greater account control and tremendous cross-selling opportunities, as well as a recurring engine of maintenance revenue," the analysts wrote. "While many investors believe Oracle's acquisition strategy is now limited by the number of targets available, we do not agree. The software landscape remains fragmented with opportunities springing up in newer areas such as software as a service. A tougher economy might only abet Oracle's strategy by lowering valuations and creating more motivated sellers."

Existing customers agree that Oracle's acquisition strategy is working, for a couple of reasons. The first is the "one throat to choke" theory, which is becoming more of a reality as Oracle acquires more companies. The second is that Oracle has realized the integration nightmare brought on by acquiring 21 application companies since 2005; while the actual product is not yet a reality, Oracle announced in April it would take on integration for its customers with its AIA (Application Integration Architecture).

Author: Renee Boucher Ferguson @ www.eweek.com

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