Nomura Securities on Global Software: A Deeper Understanding of Oracle�s (ORCL) Quarter

January 3, 2012 10:31 AM EST
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Nomura Securities on Global Software: A deeper understanding of Oracle’s quarter

Nomura analyst, Rick Sherlund, said, "It still puzzles us, how could Oracle (Nasdaq: ORCL) go from showing 16% new software license growth in the August quarter to 2.5% in the November quarter versus Street estimates of 11%; and what are the implications for all the enterprise software and hardware companies about to report December quarter results? It just did not make sense to us, so we checked in with a number of our industry contacts over the Holiday period for their perspective."

"Fusion may be confusion for the market: Contacts tell us that Fusion may be freezing Oracle out of the final stages of some apps deals as customers resist buying the old product but are not convinced the new Fusion suite is ready for prime time. The Applications Unlimited program intended to help in the transition may no longer be effective now that Fusion is shipping. Now that Oracle has missed the quarter, the field complaints begin to surface. Mark Hurd will set pants on fire this quarter."

"We do not expect SAP (NYSE: SAP) to pull an Oracle We have been hearing good things about SAP’s quarter in Europe (of all places). No read on US business yet. It comes down to the last few weeks of the quarter as always, but we like SAP even in the wake of the Oracle quarter. We rate Oracle and SAP Buy."

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