Oracle CorporationORCL

Morningstar Rating

Stock Research and Analysis

by Rafael Garcia

Oracle has astutely leveraged its dominance of the database software industry to become a major provider of enterprise software solutions. We believe that the firm has the scale, resources, and expertise to remain at the forefront of the consolidation Read more

Bulls Say

Oracle is the top provider of database software. Research firm IDC estimates that Oracle commands 43% of the database market, followed by distant-second IBM's DB2 with 21%, and Microsoft's MSFT SQL Server with 19% in third place.

Oracle's free cash flow as a percentage of revenues has steadily improved to 33% in fiscal 2009 from 17% in 1999.

Oracle's revenue growth and operating profits highlight management's impressive track record of successfully identifying, buying, and integrating smaller software companies. Read more

Bears Say

Small IT companies, such as Rimini Street, provide cheaper support for Oracle's software products, putting pressure on the firm's maintenance revenues.

Open-source databases, such as MySQL and PostgreSQL, which small companies have been keen to deploy, pose a threat to Oracle's dominance of the database market.

Although the overall growth of the database market is slowing down, several small providers of specialized database applications are growing at a fast pace.

Oracle's purchase of Sun can take the company too far afield if it dabbles into too many new areas, such as chip design and commercialization of products for individual users. Read more

Strategy

Oracle provides a wide portfolio of enterprise software solutions (database, middleware, and applications) designed to solve the full range of IT requirements of its customers. By offering a broad variety Read more

Management

Lawrence Ellison has been CEO of Oracle since he cofounded the company in 1977. He is the architect behind the firm's transformation into an enterprise software powerhouse. Overall, we believe that Oracle has a talented and experienced management team. Read more

Profile

Oracle sells a wide range of enterprise software solutions, including databases, middleware, and applications. Software license updates and product support, the most profitable Read more

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