Weekly Software Notes: Oracle, SAP SE and Symantec

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The week ended January 30th was an eventful one for the software industry. Shares of global database software leader Oracle Corp. (NYSE: ORCL) fell by 3% Monday through Thursday, while SAP SE (NYSE: SAP) gained 2%. Software security major Symantec (NYSE: SYMC) fell by 4% during the week. In comparison, the Dow Jones U.S. Software Index was down 6% Monday through Thursday, while the broader S&P 500 declined by 1%.

In this report, we take a look at the major events in the software industry during the week ended January 30.

Oracle

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Oracle trended lower during the week following criticisms of the company’s unpopular pay and governance policies.  Two European pension funds, PGGM and Britain’s Railways Pension Trustee Company Ltd, wrote a letter to Oracle complaining about the disproportionate influence exercised by CEO and major shareholder, Larry Ellison, over the board and compensation structure. [1]

Mr. Ellison, who owns over a quarter of the Oracle’s shares, [2], earned $67 million in compensation last year. The aforementioned pension funds have lobbied Oracle regarding their governance and pay policies for the last four years, but to little effect. It is unlikely that their latest effort will be any more fruitful.

Meanwhile, Oracle released an update to the Oracle Service Cloud and has integrated advanced co-browsing capabilities in the suite. The company has leveraged the technology gained from the LiveLOOK acquisition last year to allow instant screen-sharing between a customer and the customer service agent. [3] Other enhancements in the update include skill-based routing to customer service agents, visitor browsing histories and social capabilities.

SAP

SAP had a mixed week on the bourses following release of fourth quarter earnings on January 20th, but managed to close the week up by 3% Monday through Thursday.

On January 26th, the company introduced a new marketing gap analysis tool in collaboration with Raab Associates. [4] According to SAP, “the free interactive tool provides marketers with personalized recommendations on focus areas of investment for their organization”. The tool works by asking the respondent a series of questions and running the responses through a set of rules to compare ideal requirements with the existing capabilities.

Broadly, the tool is merely a marketing play for customer engagement and is aimed at reeling in unsure marketers by providing a glimpse of what SAP can do for them.

Symantec

Symantec fell by 2% on Tuesday and Wednesday each to close the week down by 4% Monday through Thursday.

The company announced on January 28th that it has chosen to name its proposed independent information management company as ‘Veritas Technology Corporation’. [5] Symantec had previously announced that it will split its information (storage) management business into an independent, publicly traded company. The name is derived from the company that Symantec acquired back in 2005, ‘Veritas Software Corporation’.

The Veritas business generated $2.5 billion in revenue for Symantec in fiscal year 2014. The company estimates the current market size for its products to be around $11 billion, and the market is posed to grow at a CAGR of 7% to reach $16 billion by 2018. [5]

Meanwhile, in yet another churn in Symantec’s executive suite, its Managing Director Brenton Smith departed from the company on January 29th. [6] Following his departure, Paul Simos, has been appointed as the acting head of enterprise sales, Pacific region. Mr. Smith’s resignation comes amidst unconfirmed reports that Symantec plans to have its senior management team in place by the beginning of April. [7] The latest development follows a string of new appointments to Symantec’s C-suite last year, including CEO, CFO, CIO and CAO (Read: Symantec’s Revival: The Security Business Holds the Key).

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Notes:
  1. European pension funds lobby Oracle on pay, governance, Reuters, January 25, 2015 []
  2. Yahoo Finance []
  3. Oracle Press Release, January 28, 2015 []
  4. SAP Press Release, January 26, 2015 []
  5. Symantec Press Release, January 28, 2015 [] []
  6. Symantec managing director, Brenton Smith, departs, ARN, January 29, 2015 []
  7. Symantec sources claim exec teams in place by April Fools’ Day, The Register, January 26, 2015 []