Oracle mainly competes with IBM, Hewlett-Packard in the hardware business, IBM and Microsoft in database and middleware software business and SAP in the applications software business. In its recently announced quarterly earnings report, Oracle management cited that it continues to grow its hardware and software business faster in terms of market share and profitability. [1]
Oracle claims that it is not only getting ahead in the server hardware market with faster Exadata line of hardware, but also in the software market since the high-end servers makes Oracle’s software access faster. We estimate that Oracle’s software business is much more valuable than its hardware business.
As per our estimates, Oracle’s software business constitutes around 86% (database, middleware and application software) while its hardware business (servers and storage) constitutes only around 8% of $38.16 Trefis price estimate for Oracle stock, which is about 21% higher than the current market price.
Special Offer: Next Inning Technology’s Paul McWilliams recommended EZchip as his best pick for 2010 and it gained 122%. What’s on his buy list for 2011? Click here for the gory details on more than six dozen tech stocks to buy and avoid in Next Inning Technology Research.
Source:-http://blogs.forbes.com/greatspeculations/2011/01/21/oracle-can-milk-exadata-servers-and-software-for-cruise-above-40/
