Oracle is still the king of relational databases and a big power in on-premises enterprise applications. The problem is both of those market segments seem to be, well, less important than in the past. The company has also struggled to find its footing in cloud computing.
That’s why I hope to be glued to my laptop next week (Structure permitting) when Oracle announces its fourth quarter earnings. And this is what I want to hear about:
1: Hardware momentum (or continued lack thereof). Can Oracle finally crack the hardware code? Given its new alliance with Dell that will, in essence, let Dell offer its own version of an “engineered system” running Oracle database and applications, I’ve got to think that tepid hardware sales are starting to take their toll in software license sales as well.
2: HANA envy. It’s been a long time since we’ve seen an enterprise product with a halo as big as SAP’s HANA in-memory database and analytics offering which will soon be made into a cloud service. SAP has been basking in that glow for more than a year. That’s got to bug Oracle CEO Larry Ellison and co-presidents Safra Catz and Mark Hurd. What will Oracle do to steal some of that good feeling for its own in-memory and analytics plays?
3: Fusion traction: Are users of Oracle’s legacy applications moving to the new-generation Fusion versions, sitting pretty on existing versions, or jumping ship to alternatives? In February, Forrester Research surveyed 139 enterprise clients and found they were not wild about Fusion. Of those surveyed, 65 percent had no plans to move to Fusion; 24 percent were indecisive. But perhaps most scary for Oracle, 29 percent said they planned to defect to another vendor. Oracle blasted the findings as inaccurate and out of date but Forresteranalyst Paul Hamerman stuck to his guns.
4: How big is Oracle in big data? What traction is this company, the undisputed king of relational databases, doing outside that realm with its Big Data Appliance and other less SQL-y gear? Can Oracle parlay its strength in legacy databases in this new territory?
5: Support and maintenance re-ups. Are business customers paying for support and maintenance or are they balking? Oracle has traditionally seen these fees — it typically charges customers 22 percent of the purchase price each year for continued software support and maintenance — as its birthright. But customers hate those fees. In a research note Sunday night, Nomura Securities analyst Rick Sherlund raised a red flag when he wrote:
“Oracle is reportedly now the second most active software vendor (next to IBM) in conducting customer usage audits intended to bring in revenues from customers that are not in compliance with their software agreements.”
If a customer is paying maintenance because there’s a gun to his head and not because he’s deriving real value, he’s not a happy customer.
It’s fine for Oracle to buy its way into newer-era computing — with acquisitions of SaaS companies like Rightnow for CRM with Taleo for talent management etc.– but it needs to tend to its legacy database and applications customers as well because right now, they’re the ones paying the bills. And, with the shift to big data and new app delivery models, they’re more open to switching vendors.