Oracle is a company which has led a very up-and-down past. Actions perpetrated by the company have been vilified in the past, although this is a recurring theme for many giant corporations. For whatever reason though, Oracle has always reserved a special spot in peoples list of disliked companies. Now, it seems Oracle had better get itself ready for some more close scrutiny from analysts.
Something at the company doesnt add up. Reuters feels the same way. Back in December, Oracle set a record for itself: it was the first time in a decade they missed earnings estimates. They blamed an unpredictable global economy. Granted, the economic climate is quite unstable at the moment, so that does make sense - but evidence is mounting that the economy is not the only thing challenging Oracles position in the market.
The company lost a valuable partner in Hewlett-Packard, and their long-time rival SAP is slowly gaining more traction. Oracles hardware business, Sun Microsystems, was bought in 2010 for $5.6 billion. Now, there are beliefs Sun is becoming a pain in Oracles sides, with declining sales figures causing the company further issues and difficulties. Pressure from SAP is mounting as well, since they also produce database software, which has historically been Oracles main strength.
It makes sense Oracle may have run into economic issues last year, but none of their competitors reported the same misses in their earnings. Oracles next quarterly results are scheduled for March 20th, but opinions from the industry arent going too well for the company. Nomura Securities analyst Rick Sherlund said: "Oracle is a company with some issues right now."
Suns acquisition in 2010 could be one of several issues plaguing the company since. While it means Sun Microsystems now ties even more closely with Oracle it could also cause further competition and rivalry, since the company placed itself in direct competition with the hardware sellers that helped make Oracle strong in the first place. Almost a year ago now, the company also made the choice to drop OpenOffice. The software could have acted as free promotion for Oracle and Sun, but the companys future could change in just four days" time.