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Thomas Otter

At the risk of ignoring my own dont throw mud commentary, The Psft payroll engine is cobol !-)

Thomas Otter

Thanks for correcting Larry!
He must be really worried about SAP, given that he spent the whole conference dissing us...

Here at SAP I think we should say "okay, Oracle are back in business", rather than look for ways to argue that they are somehow fooling the analysts with clever numbers. Having a strong competitor keeps you on your toes. We need to behave like fusion is on track, even if it may not be.

We need to keep building better software than they do, and spend our time listening to customers, not Larry.

The share price will then look after itself.

Niel Robertson


Nice wrap up as always. As to your misinformation point #1 - Ellison should really be careful what he is saying here. As far as I know, Fusion is not out. That leaves Oracle EBS, PeopleSoft, JDE, and Siebel. Each of these has a proprietary, ABAP-like language and with the exception of EBS, none of them natively support Java:

Oracle: PL/SQL
PeopleSoft: PeopleCode
Siebel: Siebel VB (Visual Basic for Siebel)
JDE: BFL (Business Function Language - a C derivative)

The only real question here is does Ellison prefer being the pot or the kettle, because they are both black. And to SAP's credit, you can actually USE java today with their apps where you can't (unless you write a web service in Java and connect it using OAS or BEA). Sometimes exec marketed FUD and positioning just goes to far. I think Ellison may have crossed the line here.


Over analysis.

There is a simple reversion to the mean. These are cyclical companies and cyclical stocks. The mean license rate for SEBL had turned negative. ORCL bought this for the cash flow, There are a lot of other missconceptions (like license biz is more profitable than services).

But I guess people need something to write about and analysts need jobs. How about analysts like at Goldman downgrading/upgrading stocks using the last close in their reports vs. first available price. This is a concious attempt to pad performance.


Mark -

Thanks for the kind words. While I'm proud of my efforts on the sell-side, I was a junior guy at a non-banking firm in the midst of the bubble, so my experience probably wasn't typical of the household names in a lot of ways (Chuck Phillips being the top dog in the industry at the time, ironically). When you're at a small firm, and weren't generating deal flow, you had to be able to a) make differentiated calls and b) cover a wider array of companies. In any event, I saw the writing on the wall in terms of the way the sell-side research model was changing and happily transitioned to the buy-side in 2000.

Something to remember, being a good sell-side analyst is, unfortunately, not about making good investment recommendations. If you read Dan Reingold's book (Confessions of a Wall Street Analyst), you get a real sense of what it took to be a great sell-sider. It was as much, if not more, about glad-handing, travel, client relationships, and the ability to maintain good relationships with your coverage companies while, at the same time, being intellectually honest in your writing. Throw the conflicts of investment banking into the fold (that existed then, not now), and it's a tough, tough job.

As to your points on SAP.

1) I saw Citigroup's number and tried my best to vet the number, but simply couldn't. Frankly I think he did a very poor job of spelling out his conclusions if you read the entirety of the piece; and when I added up the numbers pro forma I got a different number. It showed Oracle did in fact have "organic" growth for the first time in a long time, but it was much lower than the reported Gaap numbers obviously.

2) As to Siebel, again I view that as a case of reclassification. It's not apples to apples because we don't know whether Oracle is including any deal that's got anything outside of CRM in their core Oracle apps number. My supposition is the $31 million relates to deals that were clearly, 100%, CRM-related.



Mark Crofton

You must have been a pretty good sell side analyst in your day b/c you scratched beneath the surface more than almost any of the others have in the last couple days. The guys at Citi in the UK being the exception. In fact, they picked up on something that you didnt' mention: "pro forma licence revenues of the combined business were $249m in 2005 and thus licences have actually declined c8% y/y."

Here's another question: What the heck happened to Siebel? 112M in the comparable quarter a year ago (Siebel's Sept 05) and 31M this quarter. Even accounting for inflated Siebel quarter pre-acquisition and some Siebel Analytics revenue that Oracle puts into MW, there's a considerable delta.

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