Oracle's earnings disappoint on a lack of cloud business growth (Part 5 of 5)
SAP leads the analytics and business intelligence market
During the company’s conference call to announce its fiscal Q3 2014 earnings, Oracle mentioned that its Data Analytics division saw very strong growth of 40% during the quarter. According to Gartner, SAP (SAP) leads the analytics and business intelligence market, with a share of 22%. Oracle (ORCL), with 15% market share, comes second. IBM (IBM) comes third, with 12%, while SAS Institute comes fourth, with 12%, and Microsoft (MSFT) comes fifth, with 9%. This shows that the analytics and business intelligence market is quite competitive, and Oracle will need to keep innovating in order to grow.
Oracle is leveraging its Endeca acquisition to tap into data analytics
Management mentioned that the integration of Endeca and Exalytics has paid off. Endeca is a big data vendor specializing in analyzing and providing business intelligence for unstructured data. Oracle had acquired Endeca in October 2011 for a valuation of more than $1 billion. During the conference call, Mark Hurd, Oracle’s president, discussed the success of Oracle’s data analytics solution compared to competing products such as SAP’s Business Objects, IBM’s Cognos, and Tableau (DATA). Hurd said, “Traditionally, Oracle would see Business Objects and Cognos and we actually see Tableau a lot more than we see those two at this point. And frankly, I think the integration, what we’ve done with Endeca, with Exalytics has paid off. The sales people, we brought paid off and you see it show up in our results. There are other things in Middleware, Heather, that performed very well as well. But of materiality that’s probably the one to call out which is data analytics.”
Larry Ellison, Oracle’s chief executive officer, also commented, “If I could just add one thing to that, with the release of Oracle and memory database with 12c, our data analytics performance is going to increase by more than a factor of 10. In some cases, they are that more than a factor of a 100. So, we think this summer with 12c, our data analytics business is going to take off and of course the intention is to sell a lot of those data analytics products in the cloud as opposed to our premise.”
Ellison further explained, “We will give customers a choice, but will offer those data analytics in the cloud, data analytics on premise. It’s a big push for us. As Mark said, we see new competitors and an opportunity once again to move to the front of the pack to become the number one data analytics company in the world. We think the new competitors are small and innovative. The old competitors have a lot of market share and we think that market share is there for the taking as long as we can deliver high-quality technology and that’s what we will do this summer.”
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Browse this series on Market Realist:
- Part 1 - Oracle’s earnings disappoint on a lack of cloud business growth
- Part 2 - Oracle is starting to compete with cloud application specialists
- Part 3 - Engineered systems are a silver lining to Oracle’s hardware losses
- Information Technology