Slow adoption and growth of Oracle’s offerings are a concern
Key takeaways from Oracle's 2Q15 earnings (Part 8 of 13)
Slow adoption of 12c database
Oracle (ORCL) has yet to see wider customer adoption of its 12c database software that it released in 2013. Oracle claims it’s a market leader in the relational database market, with a revenue share of 48.3%. Oracle also claims it holds a larger revenue share than its four closest competitors combined: IBM (IBM), Microsoft (MSFT), SAP, and Teradata. However, increased adoption of Datastax scalable and flexible NoSQL database poses a threat to Oracle’s dominance.
The below presentation from the 451 Group shows how NoSQL databases, NewSQL databases, and Data grid/cache products fit into the wider data management landscape. In July 2013, DataStax announced that many companies have migrated from Oracle databases to DataStax databases.
Transition to cloud is taking way too long
Oracle, like its other technology peers, is making great efforts to transition from a hardware supplier and developer to a complete cloud solutions provider. As we have seen in the earlier part of the series, cloud offerings posted a robust growth that accounts for a meager ~5% of overall revenues.
It appears that it will still take a long time for Oracle’s cloud offerings to start contributing substantially to overall revenue. Moreover, an industry shift towards subscription or cloud offerings from licensing products and services will likely increase price competition.
Currency fluctuations
Falling dollar exchange in comparison to the euro and other currencies has weighed on Oracle’s revenue, particularly for cloud software subscriptions. Hewlett-Packard Co. (HPQ) too warned that it expects the strong dollar to hurt its financial results in the near future.
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