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Why invest in Oracle

Oracle is a good investment. This is not my advice to you, but rather the gist of an article by Tim Beyers from the Motley Fool.

To explain why Oracle is a good investment, Tim debunks the three so-called threats to Oracle that have pervaded the market’s consciousness. To summarize:

Threat 1: Acquisition risk is too great

The conventional wisdom says that Oracle can’t possibly integrate all of these firms into a coherent whole. That could be true, but history says otherwise. The database king has bought untold numbers of software companies and successfully integrated them into its business.

Threat 2: Database sales are slowing

The truth is that Oracle’s database business is changing for the better. More and more firms are turning to open-source alternatives. Take the Innobase acquisition. Guess what that means? The minute you start looking at open-source options, Oracle is there waiting. Total dollar volume isn’t yet the proper measure of success. Customer count is. And with its recent acquisitions, Oracle has grown its customer count substantially.

Threat 3: Oracle has too many tough rivals

Oracle’s main rival is SAP. SAP is vulnerable. It has no database, and it has switched database partners more often than Colin Farrell at a celebrity speed-dating contest. Today, Oracle is the world record holder for pulling data from, and publishing to, SAP’s Business Information Warehouse. SAP is going to have a heck of a time extracting Oracle from its user base. Besides Microsoft, Oracle is the only firm on the planet that can offer a business every kind of software it needs to run a business.

OK, now I just need some extra cash in my brokerage account.


Filed in Oracle, Technology on 28 Mar 06 | Tags: ,


Reader's Comments

  1. |

    Hi, SAP alrady had an own database : ADBAS D which is alled now MAX DB. IBMS DB2 is shipped with SAP without inital fee. So SAP fights to get more independent from Oracle. And you could think about SAP what you want (to large, to expensive, too complex) it’s the leader in it’s area and Oracle still has nothing equal.

    Personnaly the investment in database technology is a solid base. The technology does not change every 2 years.

    Greetings Karl

  2. |

    MaxDB is a heavy-duty, SAP-certified open source database for OLTP and OLAP usage which offers high reliability, availability, scalability and a very comprehensive feature set. It is targetted for large mySAP Business Suite environments and other applications that require maximum enterprise-level database functionality and complements the MySQL database server. (Source: http://www.mysql.com/products/maxdb/)

    So, from the above, I understand that SAP does not own MaxDB.

    My thought is that everyone, every business, needs a database and an application running against this database. What matters here is growing the number of customers using Oracle products. I believe that Uncle Larry knows that (based on the many acquisitions he made so far).

  3. |

    While MSSQL, DB2 and Oracle all seem to compete in at least portions of each other’s market, I think the real threat in the long term is going to be one that comes from some company that we don’t know much about at this point.

    I’m guessing that a company like the one that builds Cache might actually be a longer term threat with their Object Oriented DataBase (OODB).

  4. |

    Besides Microsoft, Oracle is the only firm on the planet that can offer a business every kind of software it needs to run a business.

    There might be a few others. IBM, for one.

  5. |

    Mike, what you’re saying is that OODBMS will be a threat to RDBMS. Interesting. I will have to educate myself more about OODB.

    Jeff, does IBM have applications similar to Oracle’s E-Business Suite?

  6. |

    So, from the above, I understand that SAP does not own MaxDB.

    Hi Eddie, MAxDB was delivered by SAP. It is nothing else then an ADABAS D database released to open sopurce. SAP decided to do so because the supporting Community for ADABAS D was very small compared to MySql.

    Greetings Karl

  7. |

    conventional wisdom says that Oracle can’t possibly integrate all of these firms into a coherent whole. That could be true, but history says otherwise