Oracles Spin Gets Exposed
I got SAP on the phone. I was deeply and thoroughly unsurprised to hear Bill Wohl, vice president of communications at the Product Technology Group, fume. The gist of his fume was that Oracle once again isnt letting facts get in the way of a good story. He referred me back to Oracles earning announcement last Thursday. During the call, Oracle President Chuck Phillips was talking up how Oracle is beating SAP even in its home country, Germany, snapping up applications business right out from under SAPs nose."The most difficult place to beat SAP is in their home country of Germany," Phillips was quoted as saying in Oracles earning press release."Oracle winning the applications business at SAPs retail systems development partner, German retailer Karstadt, is dramatic proof that our vertical industry strategy is working in the industries that weve targeted." That would be a dramatic steal, wouldnt it? A great story. Unfortunately, its not particularly accurate. Wohl forwarded me an e-mail exchange with Karstadt in which the companys spokesperson dismissed Phillips claims. Apparently, theyre still with SAP, theyre happy, and theyre on budget. Translated from the German: "...within your article from last Friday you quoted Oracles president Charles Philips. Regarding this article I would like to offer you the following rebuttal: KarstadtQuelle and Karstadt Warenhaus AG [two operating Karstadt companies] still adhere to the strategic partnership with SAP, the leading provider for business software. Messages with other information are not true ... the involved partners are very satisfied and the project is in time and in budget." The Phillips quote, according to Wohl, actually refers to a small business that Karstadt had spun off and which was considering a Retek buy. In merry old England. Not Germany. The spin makes you a little dizzy, doesnt it? Meanwhile, Oracle is boasting of a 24 percent increase in worldwide new applications license revenue, with 42 percent in North America. This is what the market wants. After all those billions spent on acquisitions, the market wants to see some growth. Unfortunately, financial analysts are throwing darts at that numbers bubble, as well. Oracle plays catch-up in the identity access market. Click here to read more. " an analysis of Oracles application business by Prudential Securities analyst Brent Thill indicates that the company hasnt gotten much for its money," according to Bill Snyder, reporting in TheStreet.com. "By combining year-ago sales of the then-independent PeopleSoft (which had swallowed J.D. Edwards) and Retek with Oracles organic application business, Thill found that new license revenue would have been $215 million had all three companies been under one roof. But after the combination actually took place, Oracles license revenue was $127 million in its most recent quarter, 41 percent below what the companies were each doing on their own." In other words, Oracle looked at its own numbers in 2004, without looking at the aggregate of itself, JDE, Retek and PeopleSoft. So of course its numbers grew. After all, it ate half of North Americahow could its numbers not grow? But as far as the aggregate companies growth, it shrank. Shrink. Thats a good word. Maybe what Oracle needs to do to gain market share and sell its enterprise applications is to shrink the inflated verbiage and pop some balloons. Editors Note: This story was updated to provide more detail about SAPs 5-1-2 maintenance plan. Is it just Oracle, or are they all spinning you bedtime stories? Write to me at firstname.lastname@example.org. Lisa Vaas is Ziff Davis Internets news editor in charge of operations. She is also the editor of eWEEK.coms Database and Business Intelligence topic center. She has been with eWEEK and eWEEK.com since 1995, most recently covering enterprise applications and database technology. Check out eWEEK.coms for the latest database news, reviews and analysis.