Oracle maintains that the view for 2012 and beyond has significant opportunity, even in the face of near-term economic uncertainty

Across both its software and engineered systems portfolios, Oracle’s focus on customer wins and highlighted deployments remains essential to its growth strategy, shown in recent executive narratives to stockholders, the press and Oracle OpenWorld attendees. TBR believes this sales-centric mentality alongside Oracle President Mark Hurd’s comprehensive campaign to expand distribution for Oracle’s engineered systems within direct and indirect channels positions Oracle to start CY2012 with a foundation for strong growth.

In an unusual contradiction, Oracle is closing out the calendar year with product-focused momentum, even as the company failed to close expected pipeline opportunities within CY4Q11. This is a significant shortfall for a company that consistently beats its guidance – and executives appear well aware of steps needed to rectify this unusual misstep. Oracle’s Exa-systems remain active in the market and continue to appeal to Oracle’s deep install base. The company noted strong performance in the public sector as well as within CRM and ERP in CY4Q11 – countering lagging results in other segments. We maintain Oracle continues to credibly position itself as having an offering for nearly any customer, with increasingly flexible delivery methods inclusive of the cloud – a key position to hold as economic conditions continue to drive customer concerns.

A rare miss for Oracle in its CY4Q11 earnings performance indicates the company’s focus on long-term innovation has not gone unnoticed by customers

Though operating margin continues to improve (climbing to 35% – a 3% year-to-year and sequential improvement) and trailing 12-month operating cash flow improved 45% over the prior year period to $13.1 billion, Oracle’s overall financial performance during CY4Q11 fell short of expectations. Total revenues climbed only 2% year-to-year, sustained by the depth and strength of Oracle’s software maintenance base (at nearly $4 billion in the quarter, showing a 9% year-to-year improvement). Hardware products revenues fell to $953 million, a year-to-year decline of 14%.

Oracle’s 4Q11 earnings narrative told a story of delays impacting growth – most notably a reputed delay in time to close credited to customers worldwide being impacted by ongoing financial fluctuations in the macroeconomy and within specific markets. Additionally the late-in-the-quarter launch of Oracle’s SPARC SuperCluster drove an apparent “Osborne effect” within Oracle’s server pipeline, as customers elected to wait for the pending T 4-4 launch.

The repeated highlighting of Tier I customer wins by CEO Larry Ellison signals Oracle remains committed to emphasizing product excellence and market traction to sustain share gains. Taking into account both the launch of Oracle’s Database Appliance and the work of Mark Hurd and Judson Althoff in driving revenue growth for its channel partners and ecosystem growth at competitors’ expense, TBR predicts Oracle will see a performance rebound in the near term – driven by both the midmarket segment and expanded traction in the cloud, where Oracle is underpenetrated across a vast number of small and midsized accounts.

Ongoing cash strength combined with the Endeca and RightNow acquisitions position Oracle to sustain mindshare in BI, analytics and cloud computing

Oracle’s agreement to acquire Endeca Technologies signals its recognition of the possible market opportunity when comprehensive business intelligence and analytics capabilities are engineered into its systems and storage portfolios. Endeca’s ability to catalog, manage and deliver rapid insights on scaling amounts of unstructured data makes the company an appealing acquisition for Oracle, both for near-term inclusion in ecommerce offerings and for longer-term feature buildouts in its Exadata and big data appliances. The legacy Sun business can see growth from access to Endeca’s Tier I customer roster, which includes Ford Motor Company, Hyatt, IBM and Wal-Mart. Moreover these customers will find Oracle hardware more compelling when it includes Endeca’s capabilities to store, manage and deliver rapid access to accelerating amounts of unstructured data.

Despite Larry Ellison’s historical distaste for the segment, Oracle’s growing cloud portfolio signals a nascent “Red Cloud” to pair with the “Red Stack.” With the acquisition of RightNow, Oracle is maintaining a targeted competitive focus on both SAP and Salesforce.com, integrating the strengths of RightNow’s cloud delivered human capital management into its emerging public cloud offering. As Oracle continues to publicly embrace the cloud – late relative to competitors – RightNow delivers immediate, proven cloud credibility.

Remaining mindful of customers’ economic and investment concerns, TBR maintains Oracle has used the power of its purse to galvanize its cloud presence, establishing a timely position for maximizing install base share of wallet during a near term that promises ongoing customer concerns about investment scale and scope. A promise for more Fusion Applications in the cloud – particularly Cloud ERP and Cloud CRM – has the potential to sustain Oracle’s cloud momentum in the first half of 2012, provided that the broader Fusion Application pipeline continues to meet and exceed customer expectations.

Please feel free to use this content or call/email Elizabeth Hedstrom Henlin (603-929-1166) for additional commentary.

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Related:

• Oracle OpenWorld 2011 – Aloha:Find F5 Booth 1527
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• Oracle OpenWorld 2011: Interview with F5′s Andy Oehler
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Technorati Tags: F5, oracle openworld, integration, Pete Silva, security, business, goldengate, technology, zfs, storage, oracle, oow2011

Connect with Peter:	Connect with F5:

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Related:

• Oracle OpenWorld 2011 – Aloha:Find F5 Booth 1527
• Oracle OpenWorld 2011: BIG-IP WANOp & Oracle GoldenGate
• Oracle OpenWorld 2011: F5 ARX & Oracle ZFS Storage
• Oracle OpenWorld 2011: Interview with F5′s Andy Oehler
• Oracle OpenWorld 2011: BIG-IP ASM & Oracle Database Firewall
• F5 YouTube Channel
• Oracle OpenWorld Live

Technorati Tags: F5, oracle openworld, integration, Pete Silva, security, business, goldengate, technology, zfs, storage, oracle, oow2011

Connect with Peter:	Connect with F5:

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Oracle OpenWorld Videos:

• Oracle OpenWorld 2010 – F5 and Oracle Partnership
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Technorati Tags: F5, infrastructure 2.0, integration, Pete Silva, security, business, education, technology, application delivery, cloud, virtualization, oracle, oow

twitter: @psilvas

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Technorati Tags: F5, infrastructure 2.0, integration, Pete Silva, security, business, education, technology, application delivery, cloud, virtualization, oracle, oow

twitter: @psilvas

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Technorati Tags: F5, infrastructure 2.0, integration, Pete Silva, security, business, education, technology, application delivery, cloud, virtualization, oracle, oow

twitter: @psilvas

Definition

The terms red stack and blue stack are used to indicate the java application platform which is used to support your Oracle JDE EnterpriseOne deployment.   With the Release of EnterpriseOne 8.9 Oracle provided JDE clients a choice of application stack.  Customers could continue to use IBM’s products, or adopt Oracle’s products.   For JDE customers, this started a debate over the application stack which should be used.  The choices are as follows:

Blue Stack – IBM’s product suite including the WebSphere Application Server and the DB2 Database.

Red Stack – Oracle’s product suite including the Oracle Application Server and the Oracle Database.

Due to the fact that these product suites were designed & developed to industry standards, the ability to mix and match applications are supported.  As a result some slight variations on the Red & Blue them were derived.

Purple Stack – This is an application stack that mixes products from both IBM and Oracle.  The two variations on this stack includes:  1) A WebSphere Application Server with an Oracle Database, and 2) An Oracle Application Server with IBM’s DB2 Database.

Green Stack – With the standard ODBC Drivers, the option to use Microsoft’s SQL Server DBMS as the stack’s database platform is supported.  Therefore, either the WebSphere Application Server or the Oracle Application Server may be paired with the Microsoft SQL Server DBMS for a green stack option.

Possible Stack Configurations

Stack Components

The components of the application stack are licensed differently.  Therefore, when making a comparison between a functional stack between IBM and Oracle, one must know that it is not an “apples-to-apples” comparison.  The following table is an itemization of the license components within the red and blue stack:

Oracle uses the more granular way of packaging products to make an argument that the customer receives more with the red application stack.  However IBM offers an alternate description that illustrates that the stack is truly comparable with regard to the number and depth of capabilities.  The following functional breakdown illustrates IBM’s position (the items listed in colored font are base level license configurations that are received with JDE):

Decision Variables

Given the long history that IBM has had with the JDE platform and the dedication that Oracle has publicly announced concerning the support for JDE and Fusion running on WebSphere, the stack you may be considering does not have an immediate compatibility risk to factor into your decision-making process.  Therefore, Oracle suggested that the remaining parameters are relevant when making the selection:

• License & maintenance fees
• Value of included products
• Platform support
• Matches your IT strategy
• Application performance/scalability
• Ease of installation and configuration
• Industry accolades
• Path to fusion
• Single-source vendor

In each of these parameters, the organization’s perspective may make the choice more apparent.  However, from a pure technical perspective, there is not a clear winner.  One may make the decision based upon the internal skill sets within their organization, internal technology standards, and other maintenance and support cost factors.