Annex Bulletin 2011-19 December 20, 2011
A partially OPEN edition
Happy Birthday, IBM! (IBM to turn 100 on June 16; what's the secret of its success?)
Apple Falls from Tree to Cloud, Then to Earth... with a Thud (Last major holdout joins race to cloud, but falls flat on first attempt)
Updated 12/20/11, 3:30PM HST, adds Market Update
Analysis of Oracle's Latest Quarterly Results
Oracle Runs Out of Oracles
Stock Takes a Big Dive in After-hours Trading
HAIKU, Maui, Dec 20, 2011 -
Some analysts being quoted in the media seem to attribute that to some general industry malaise and the weakness in spending in the enterprise sector. We don't see that. Which is the reason for this quick comment. We see Oracle's aggressive and arrogant behavior in the marketplace as the main reason for its shortfall.
Ever since he hired Mark Hurd after the latter was booted out of HP over a sex scandal, Larry Ellison has been engaging in a war of words with HP. When we were in New York a couple of weeks ago, driving out of JFK we were struck by a huge billboard Oracle had placed over the Long Island Expressway expressly attacking HP.
Customers don't like aggressive and arrogant vendors. They like to work with companies that put the customer first. So they are choosing an alternative if they can help it. In Oracle's case, that would be IBM. "When two fight the third one profits," goes an old Serbian proverb. That would be Big Blue.
Rather than look for any industry omens in Oracle's lack of oracles in this quarter, investors looking for solace will probably find it in companies like IBM, Apple or Google which are driven by customer needs rather than their leaders' egos.
In short, we don't see anything wrong with the IT industry at the moment that would warrant a correction. But some of Oracle's leaders could use some attitude corrections.
Happy bargain hunting
HAIKU, Maui, Dec 21 - Oracle's steep dive in after-hours trading accelerated during today's regular market action. The stock is down 14% as we write this, double the among of last night's drop. And the fear of an industry wide slumped also pulled some other IT leaders' shares down with it, though not nearly by as much. Take a look...
Don't expect such trends to continue. As we said when Oracle's latest results came out, we don't see anything wrong with the industry or customer spending. It's only Oracle that needed to make a correction.
Indeed, today (Dec 22), the only stock among the top leaders we follow to still be in the red this morning is Oracle (see the table on the right).
Or just click on SEARCH and use "company or topic name" keywords.
Annex's 33rd Birthday (May 15, 2011)
Big Blue "Rock of Gibraltar" Stands (Analysis of IBM's first quarter business results)
Wall Street's New "Rock of Gibraltar" (Annual update to our 5-yr IBM forecast)
HP: Ghost of EDS Haunts HP (Analysis of HP's first quarter 2011 business results)
Case Makes a Case for Innovation (Analysis of new "Startup America" program)
HP: New Broom Sweeps Clean (Apotheker fills our first prescription in board shake-up)
IBM: Another Phoenix of the IT Industry , Analysis of IBM's 4Q10 result
One Man's Pain, Another Man's Gain? (Analysis of possible impact of Steve Jobs' health on IBM, Intel, other IT companies)
Consumer Rules (Analysis of top 15 global IT leaders' stock and business performances)
IBM Hardware to Rise and Shine Again (Analysis of IBM STG business results and outlook)
BARRON's: IBM Shareholders Will Like New Year (Analysis of Barron's article on IBM stock)
HP's "Stealth CEO" Sounds Bullish in First Public Appearance (Analysis of HP's fourth quarter business results)
Silicon Valley Rodeo (Editorial on shenanigans and costly trivial pursuits)
IBM Business Up, Stock Down (Analysis of Big Blue's third quarter business results)