As mentioned in a previous note of the day, Oracle has been placing greater emphasis on the hardware business since its acquisition of Sun. Oracle is leveraging Sun hardware to sell more Oracle database software. Since Database Software Licenses constitute 37% of the $34.78 per share Trefis price for Oracle, growth in database market share is an important factor for Oracle’s stock
The company recently announced a new database system called Exadata Version 2 consisting of Sun hardware in combination with Oracle database software. This database system is designed to serve the segment of the database market that is concerned with high speed warehousing and transaction processing. Fast warehousing databases are useful for uploading bulk data. For example, end of day operations in a bank will use a data warehouse database. Online transaction processing (OLTP) databases are used for recording transactions in real time. For example, normal ATM transactions during the day will be stored in OLTP database real time.
We believe that Exadata Version 2, which is claimed to be the fastest data warehousing and OLTP system, will have a positive impact on Oracle’s database software market share (currently around 51%).
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Within Oracle’s content on our platform, you can see how the company’s stock would be impacted if Oracle’s Database Licenses Market Share were to increase as a result of new Sun-Oracle database systems.