Global CIO: Oracle Upside Earns Outperform Rating From Wells Fargo - InformationWeek
IoT
IoT
Cloud // Cloud Storage
Commentary
9/14/2010
07:02 PM
Bob Evans
Bob Evans
Commentary
50%
50%

Global CIO: Oracle Upside Earns Outperform Rating From Wells Fargo

Oracle's just starting to wring full value out of Sun and is firmly among top players in overhauling data centers, says analyst Jason Maynard.

Lots of CIOs here at the InformationWeek 500 Conference have been scratching their heads about Oracle hiring Mark Hurd after its ouster of long-time president Charles Phillips, but beyond that drama Larry Ellison's company is just beginning to fully leverage the transformative potential of its Sun acquisition, according to analyst Jason Maynard of Wells Fargo.

We'll find out Thursday afternoon (Sept. 16) about Oracle's first-quarter results and Ellison will be sure to talk about ongoing momentum and growth from its purpose-built Exadata 2 system. And in spite of the hubbub over Hurd's arrival and Phillips' ouster, Oracle's expected to post solid results.

As Maynard writes in a research note, " We think Oracle is one the best plays on the data center transformation theme and can leverage the Sun acquisition to take a larger share of IT spend. We believe Oracle can gain share given its scale, proven execution, and ability to deliver purpose-built optimized systems.

"In our opinion, Oracle will be able to grow Sun profitability and continue expanding overall corporate margins and ultimately push the stock higher."

Setting stock-price appreciation aside, Maynard's analysis is important for CIOs because he's looking past the recent theatrics and probing the likelihood that Oracle's well-oiled acquisition machinery will deepen Oracle's penetration among existing clients and give it entre to new customers as well.

And in this next excerpt, feel free to swap out "investors" and insert "CIOs" for the proper context. Says Maynard, " Even with the recent price appreciation following the addition of Mark Hurd, Oracle's shares still only seem to embed a cyclical recovery in enterprise spending and discounts the potential Sun synergy and margin expansion.

Global CIO
Global CIOs: A Site Just For You
Visit InformationWeek's Global CIO -- our new online community and information resource for CIOs operating in the global economy.

"We believe the Sun deal will prove to be as transformational and ultimately as successful as the PeopleSoft acquisition.

"Oracle's highly engineered systems strategy reduces costs by eliminating unnecessary computing elements that can hinder performance and require additional indirect service costs," Maynard writes. And then he describes what he calls the company's "best in class execution":

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Previous
1 of 2
Next
Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Register for InformationWeek Newsletters
White Papers
Current Issue
Top IT Trends for 2018
As we enter a new year of technology planning, find out about the hot technologies organizations are using to advance their businesses and where the experts say IT is heading.
Video
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll