Oracle Taps Growth Opportunities With Instantis Acqusitions And Stake In Engine Yard

by Trefis Team
+13.24%
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Trefis
ORCL
Oracle
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Oracle (NASDAQ:ORCL) has been growing rapidly this year as evidenced by its stock price which started at $25-$26 levels at the beginning of the year and is now trading around the $30-$31 level. The company has been on the lookout for growth opportunities and has snapped up smaller companies in social media, virtualization and project management areas. Its latest acquisitions include Instantis and a minority stake in Platform-as-a-Service (PaaS) vendor Engine Yard.

In its most recent filings, Oracle reported revenues of $8.2 billion, up 3% y-o-y. Software and cloud subscription was up 11% y-o-y with revenues of $1.6 billion and cloud revenues were $222 million for the quarter. The operating cash flow for this quarter was at an all-time high of $5.7 billion, up from $5.4 billion last year. And free cash flow grew to a record $13.4 billion over the last 4 quarters. The company also guided for EPS between $0.59 and $0.63 for the next quarter, up from $0.54 last year.

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Oracle, which is the biggest player in database software, has set its sights on high growth markets such as social media analytics, virtualization and cloud based CRM and ERP businesses. It has acquired companies such as Selectminds, Xsigo Systems, Skire, Collective Intellect and Vitrue, among others, recently. This is a clear push to make its presence felt in social media, virtualization, cloud and project management markets. The company is going all out to take market share in the high-growth cloud CRM space, and we expect this to be the growth engine for the CRM & ERP markets.

Instantis and Engine Yard operate in Oracle’s areas of interest. Instantis will fortify Oracle’s project management software division, Oracle Primavera, which was established after Oracle acquired Primavera in 2008. Engine Yard competes with Salesforce.com’s Heroku service, which is a cloud application platform. The Engine Yard PaaS automates configuration, deployment and maintenance of cloud environments and will enable application developers to rapidly build, deploy and manage cloud based applications. The financial details of both the deals were not disclosed.

We currently have a $41.24 Trefis price estimate for Oracle, which stands nearly 20% above its current market price. Database, middleware and application software accounts for nearly 80% of its value while enterprise server and storage hardware accounts for more than 10%.

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  • commented 2 years ago
  • tags: SAP ORCL CRM
  • SAP, Salesforce, and Oracle are all enjoying quite a bit of CRM success lately, but I don't think it will last. There are way too many new software options out there that blow those ancient systems away. Things like JobNimbus (http://www.jobnimbus.com) bring a whole new interface to the table, something these three will never do but will have needed to in order to increase their adoption and usage rates. It's a travesty, but their systems are horrible to use; that's why people don't use them.
    Oracle Logo
  • commented 2 years ago
  • tags: SAP ORCL CRM
  • Evosys has successfully implemented mobile based Oracle E-Business Suite (EBS) approval solution, acton, at Nawras, Oman on 7th November, 2012. The project kicked off on 20th May 2012 and went live on 22nd Sept 2012.


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