oracle

Since Oracle has been in news some of them is positive favour and some are negative. We should start from the beginning. Oracle, the multinational computer technology corporation, was founded in?1977?by?Larry Ellison,?Bob Miner, and?Ed Oates.. ?It has played a significant role in the development of?relational database management systems (RDBMS) named Oracle and other enterprise software solutions. Oracle, a global technology company, has left an indelible mark on the world of enterprise software. This groundbreaking product revolutionized the way businesses stored and accessed their data, providing a more efficient and scalable solution compared to traditional hierarchical databases. With a rich history spanning over four decades, Oracle has consistently evolved and adapted to the ever-changing landscape of the technology industry. We will delve into the major milestones and turning points that have shaped Oracle’s journey, explore their innovative products, and acknowledge the challenges they have faced along the way. By the early 1980s, Oracle had established itself as a leading player in the database market. In 1983, the company went public, marking a significant milestone in its growth trajectory. This move not only provided Oracle with the necessary capital but also increased its visibility and credibility in the industry.

Innovation and Expansion

Throughout the 1980s and 1990s, Oracle continued to innovate and expand its product portfolio. One of the key turning points came in 1984 with the introduction of Oracle Forms, a graphical user interface development tool that simplified the creation of database applications. This marked Oracle’s foray into the realm of application development tools, setting the stage for their future offerings. In the following years, Oracle launched a series of revolutionary products, including Oracle Database version 7, which introduced client-server architecture and distributed database capabilities. This enabled organizations to scale their operations and handle increasing amounts of data efficiently.

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Acquired by Sun Microsystems

Oracle’s acquisition of Sun Microsystems in 2010 was a significant milestone in the company’s history. This strategic move allowed Oracle to expand its product offerings to include hardware, such as servers and storage systems, further strengthening its position as a comprehensive technology solutions provider.

Challenges and Resilience

Like any successful company,?Oracle?has faced its fair share of challenges and setbacks. One notable example is the rise of open-source databases, which posed a threat to Oracle’s dominance in the market. However, Oracle responded by embracing open-source technologies and integrating them into their product portfolio, ensuring they remained relevant and competitive. Another prominent challenge came in the form of legal battles. In 2010, Oracle filed a lawsuit against Google, alleging copyright and patent infringement related to the use of Java in Google’s Android operating system. The legal battle spanned several years and showcased Oracle’s determination to protect its intellectual property.

Oracle’s Product Portfolio

Oracle?offers a wide range of products and services designed to meet the diverse needs of businesses across various industries. Some of their flagship products include:

·??????? Oracle Database: A powerful and scalable relational database management system.

·??????? Oracle Cloud: A comprehensive cloud computing platform offering infrastructure, platform, and software as a service (IaaS, PaaS, SaaS).

·??????? Oracle Fusion Middleware: A suite of middleware software that enables organizations to integrate, automate, and streamline their business processes.

·??????? Oracle ERP: Enterprise resource planning software that helps businesses manage their financials, supply chain, and human resources.

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In conclusion, Oracle’s journey has been marked by remarkable milestones, innovative products, and the ability to self-protective overcome challenges. As a pioneer in the database industry, Oracle has consistently adapted to the evolving needs of businesses, expanding its product portfolio and embracing new technologies. With a strong focus on innovation and resilience, Oracle continues to play a pivotal role in shaping the future of enterprise software.

Latest challenge

Proposed that strong competition in the cloud-computing industry and a digital spending pullback were weighing on its revenue growth. The company was on track to lose more than $30 billion in market value. The stock has risen around 50% this year on optimism the rise of generative AI would drive up cloud demand. Lower-than-expected revenue for the first quarter and a below-estimate forecast for the second, however, signalled the boost from AI would take longer to materialize.

Oracle, known for its database software, has been playing catch-up with cloud majors such as Amazon Web Services?(AMZN.O), opens new tab, Microsoft's?(MSFT.O), opens new tab?Azure and Alphabet's?(GOOGL.O), opens new tab?Google Cloud at a time businesses are dialling back tech spending over concerns about the economy. CEO Safra Catz also warned of near-term weakness in revenue growth at the Cerner health records business, which Oracle bought for $28.3 billion last year. The company is moving customers in the unit to the cloud from license purchases that are recognized upfront. "We continue to believe high single-digit growth might be unsustainable for Oracle given Cerner integration risks and formidable data center competition," D.A. Davidson analyst Gil Luria said, as he cut his price target on the stock by 17% to $105.

Most analysts, however, were positive on the company and attributed the share price decline to Oracle's rally in the run-up to earnings. "Shares were already up a lot recently so Q1 doesn't look like a short-term catalyst," Barclays analysts said. But they highlighted strong deferred revenue, AI backlog commentary and some positive signs in the cloud business as positives.

Their ?Standards:?The Thomson Reuters Trust Principles., opens new tab

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Cyber security category Lockbit cybercrime gang says it is back online following global police bust. Lockbit, the cybercrime gang that was knocked offline by a comprehensive international police operation earlier this month, says it has restored its servers and is back in business. Technology category ?intuitive Machines stock plummets after moon lander tips over. Shares of Houston-based Intuitive Machines slumped more than 30% on Monday after the space exploration firm said its Odysseus moon lander had tipped over and was resting on its side. Chipmaker Broadcom is nearing a $3.8 billion deal to sell its business that allows users to access desktops and applications from any device to private equity firm KKR , people familiar with the matter said on Saturday.

Oracle Corporation (NYSE:ORCL) has a resilient and recurring revenue stream that is relatively low-risk compared to other industries impacted by the pandemic. Oracle's revenue mix is shifting favourably towards growing businesses, with over 70% of revenue?being recurring or renewable. The company's discipline in operating expenses, pandemic-induced savings, and remote work policies could continue to drive operating profit growth. Oracle's database business is a significant source of revenue for the company, but it was slow to enter the cloud infrastructure market compared to AWS and Microsoft Corporation (MSFT). Competition from these players, as well as Snowflake Inc. (SNOW), poses a long-term threat to Oracle's database business despite its recent cloud infrastructure success.

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Oracle, a prominent player in the database and enterprise software industry, has indeed faced challenges in recent years. Let’s explore some key reasons behind its?market share decline:

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1.??? Developer Trends and Popularity:

Oracle’s popularity among developers has been?waning. According to data from DB-Engines, Oracle’s database technology has experienced a?terminal decline?in popularity over the years. Developers are increasingly gravitating toward?open-source databases?like?MongoDB?and?PostgreSQL. These databases have seen significant growth in adoption and usage. However, despite this decline in developer interest, Oracle still maintains a strong foothold in the global database market, accounting for roughly?half of the market share.

2.??? Revenue vs. Developer Adoption:

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Oracle’s CEO,?Mark Hurd, seems less concerned about developer adoption and more focused on the fact that Oracle continues to generate?billions of dollars in revenue. While open source databases and cloud databases (such as those offered by?Amazon Web Services) gain traction, Oracle’s core business remains cantered around?running critical business applications1.

3.??? Applications and Business Operations:

Oracle recognizes that its strength lies in?applications. It aims to be the go-to choice for organizations to?run their business operations. The company has extended its dominance into various application areas, including?enterprise resource planning (ERP),?customer relationship management (CRM), and more. Despite challenges in other areas, Oracle’s focus on applications has allowed it to maintain a significant share of the database market1.

4.??? Cloud Transition and Headwinds:

Oracle’s transition to the?cloud?has not been without hurdles. The shift of its?Cerner business?to the cloud has resulted in?near-term headwinds?affecting growth rates. Cloud providers, including Oracle, have faced constraints due to?IT budget limitations?and increased competition from other cloud platforms. Additionally, Oracle’s access to?in-demand Nvidia GPUs?(used for AI model training) has posed challenges for building out its AI offerings.

In summary, while Oracle faces competition from open source databases and cloud providers, its focus on applications and revenue generation continues to sustain its position in the market. However, the evolving landscape demands adaptability and innovation to stay competitive. ?Let’s delve into the differences between?Oracle?and?MySQL, two popular relational database management systems (RDBMS):

1.??? Purpose and Licensing:

Oracle is a?commercial RDBMS?designed primarily for?large-scale enterprise applications. It offers a wide range of features and capabilities. Licensing for Oracle is?proprietary?and typically involves substantial costs.

MySQL, on the other hand, is an?open-source RDBMS. It is well-suited for?smaller projects?and is widely used in web applications.MySQL provides a?GPL (General Public License), making it accessible to developers without significant licensing fees12.

2.??? Platform Compatibility:

o?? Oracle:

§? Oracle can run on various operating systems, including?Windows,?Linux,?Mac, and more.

o?? MySQL:

§? MySQL is compatible with?Linux,?UNIX,?Windows,?Mac OS X,?z/OS, and even platforms like?Symbian?and?BSD.

3.??? Database Structure and Interaction:

o?? Oracle:

§? Oracle supports a?logical database structure, allowing interaction without needing to know the physical storage details.

§? It handles?large amounts of data?efficiently.

o?? MySQL:

§? MySQL is?easy to use?and allows building and interacting with databases using simple SQL statements.

§? It follows a?client/server architecture?and is commonly used with?PHP scripts?for web-based applications12.

4.??? Security and Encryption:

o?? Oracle:

§? Oracle emphasizes?self-driving,?self-securing, and?self-repairing?features.

§? It provides robust security mechanisms.

o?? MySQL:

§? MySQL encrypts passwords for security.

§? While it lacks some advanced features, it remains a solid choice for many applications.

• OCI Gen 2 has positioned the company as a credible player in the global public cloud market. Oracle is slow to enter the cloud infrastructure market compared to AWS and Microsoft. The company has been pushing to convince users to move workloads to OCI, which has seen some success in recent quarter.

A rising player in the public cloud space

?Oracle's second-generation cloud infrastructure (OCI Gen 2) has positioned the company as a credible player in the global public cloud market, evidenced by its record-breaking +53% YoY growth in PaaS/IaaS revenue in the recent?quarter?and its ability to win significant customer commitments. OCI Gen 2's competitive edge is built on the company's "second mover advantage," which has allowed it to improve upon and surpass first-generation public clouds like AWS by offering better performance, security, availability, and pricing. Chairman Larry Ellison has specifically?cited?OCI Gen 2's RDMA network as a key advantage for large, compute-intensive workloads, as well as its dual network structure, which provides unique security and reliability benefits by separating Oracle's control plane from customer tampering.

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While OCI was initially viewed as a natural fit for traditional Oracle workloads, its expansion to 105 native cloud services has enabled it to compete with more established alternatives for non-Oracle workloads, demonstrating its ability to participate in the broader market. Given the quality of its technology and strategy, as well as the massive opportunity presented by the public cloud market, I believe that OCI (PaaS/IaaS) will be the primary contributor to Oracle's revenue growth over the next few years.

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Large Database Footprint Key to Cloud Success

Oracle's $20 billion-plus infrastructure?business?-- mostly on-premise -- places it in a good position to gain market share in the cloud Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PAAS) markets. In relational databases, Oracle has?30.2%?of the $38 billion?market, far more than any other rival outside of Microsoft. Though Oracle has been losing share the past few years because of the growing popularity of cloud databases, We ?expect it to recover some losses in the next few years, as its cloud product is showing signs of success. Unlike applications, which have already seen a big shift to the cloud, infrastructure work remains mostly on-premise. The complexity involved in moving critical legacy applications to this new model is a key reason behind the slow pace of migration.

Uber Partnership a Proof of Product Capability

Oracle's Infrastructure-as-a-Service (IaaS) segment has a quarterly run-rate of about $1 billion, compared with Amazon.com, Inc.'s (AMZN) $21 billion, but two recent wins give comfort that OCI's product capabilities are getting close to the leaders. On Feb. 13, Oracle announced a seven-year cloud infrastructure?contract?with Uber after beating Amazon. Though pricing could be a key factor in this win, I don't think any large tech company would make such a commitment purely on lower costs, lending credence to the idea that the wide gap most cloud providers have to Amazon is narrowing. This mega deal has been anticipated by investors as one of many 9- and 10-figure cloud deals in Oracle's pipeline, and further validates OCI as a strong option in the market, particularly for discerning, technologically sophisticated customers like Uber.

Magic Quadrant for Cloud Infrastructure and Platform Services?(Gartner)

Losing Database Market Share Despite OCI Success

Oracle's database footprint is very sticky and remains a key source of funding for the rest of the company. Unlike Amazon Web Services (AWS) and Microsoft, it was late to enter the cloud-infrastructure market. Since then, it's pushed hard to convince its users to move their workloads to Oracle's cloud infrastructure (OCI), which has seen some success in recent quarters. The company's infrastructure-as-a-service has a revenue run rate of?about?$4.8 billion vs $86 billion for AWS and nearly $48 billion for Microsoft Azure. However, Increased competition from Amazon, Microsoft and, more recently, Snowflake is a long-term threat to Oracle's highly entrenched and profitable database business, despite recent cloud-infrastructure success. Despite recent wins in its cloud-infrastructure business, increased competition from Amazon, Microsoft, and Snowflake is a long-term threat to Oracle's highly entrenched and profitable database business, according to Bloomberg Intelligence. While Oracle has been pushing hard to convince its users to move their workloads to Oracle's cloud infrastructure, its market share in the database-management market has declined in recent years. In contrast, Microsoft, AWS, and Snowflake have grown by double digits over the past few years and are gaining share.

Microsoft has been gaining market share over Oracle for the past few years, making it the top database provider. Azure SQL has been a key growth driver in this segment, especially as more enterprises embrace hybrid cloud. AWS is also taking share from Oracle in databases with its large IaaS footprint. Its increase in sales is driven primarily by digitally native companies that are using AWS's basic compute and storage services and embracing higher-value services from databases to machine learning.

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Valuation

Oracle could sharply pull back on sales-and-marketing expenses throughout 2023 as the software industry grapples with a spending slowdown by clients. This could help its operating margin, which will likely be crimped largely due to the Cerner deal. Oracle's valuation is far below most mega-cap software companies, which may make it less susceptible to a multiple retrenchment in 2023. On the contrary, it's possible Oracle's multiple could expand if there is steady sales growth and operating-margin expansion comes true.

Summary

?Oracle's potential for steady sales gains aided by the Cerner acquisition, coupled with a valuation well below most peers', could set it apart in 2023, even as software names like Microsoft and Salesforce post significant revenue-growth deceleration. Oracle management could also sharply rein in sales-and-marketing expenses throughout the year to boost margins hurt by the Cerner deal. The company has been working to convince users to move their workloads to OCI, which has seen some success in recent quarters, but it still lags significantly behind AWS and Microsoft in terms of revenue. it is in a position to conquer new clients, across the size, geography, industries as well as cloud vs hybrid cloud implementations. ORCL has a sizable non-US revenue stream, which is likely to be a tailwind given recent $ downdraft.