Since Oracle Corporation (NYSE:ORCL) has published the Q4 results the company has been under scrutiny and stock price plunged instantly. Oracle Corporation (NYSE:ORCL) missed the market estimates and the contribution of cloud to the overall revenue is just 4% after two years of focus in the cloud industry by the company.
Robert Breza of Sterne Agee and Lance Ulanoff editor at Mashable were on CNBC recently and they had differing opinions about the Q4 results of Oracle Corporation (NYSE:ORCL). While Breza was neutral, Ulanoff felt that Oracle Corporation (NYSE:ORCL) needs to focus on cloud and improve the revenue there.
Breza said that the results might be due to the transition and the revenue might have been due to a perpetual model where due to subscriptions, the actual sale might be divided and hence effective revenue generation would show less per quarter. Here is what he said about transition Oracle Corporation (NYSE:ORCL) might be going through:
“There is a transition period which affects about 45% of the company’s business”
Jon Fortt pitched in stating:
“Oracle is a company that knows how to say I am sorry when they screw up and I didn’t hear a lot of apology on the call. I don’t think they feel that they screwed up”
Fortt said that Oracle Corporation (NYSE:ORCL) believes that the cloud momentum might have caused the revenue shortfall. Other than that Oracle Corporation (NYSE:ORCL) had Venezuela currency issues on the EPS side. He also said that the top management that consists of names like Larry Ellison, Mark Hurd is clearly stating that Oracle Corporation (NYSE:ORCL) would not suffer like Cisco Systems, Inc. (NASDAQ:CSCO) and Hewlett-Packard Company (NYSE:HPQ) due to the cloud transition. Oracle Corporation (NYSE:ORCL) is looking to take on salesforce.com, inc. (NYSE:CRM) and looking to beat the #1 company in SaaS.
Ulanoff who had a different view of all this, stated that Oracle Corporation (NYSE:ORCL) has been doing this for two years and it is the same company that said that it understands the cloud and is taking initiatives to be cloud oriented. So after 2 years if the contribution of cloud to the total revenue is just 4% then the company needs to make a real radical shift. Ulanoff said that Oracle needs to focus more on the software rather than Hardware.
Fortt said the one thing Oracle Corporation (NYSE:ORCL) knows the best is maintaining margins. So he feels that the company is making the shift required; probably it’s a little faster than expected. However Oracle Corporation (NYSE:ORCL) is maintaining profitability at the same time according to Fortt.
Jim Cramer was discussing Oracle’s turnaround on Friday and he felt that there were execution issues and he said the issue is all about Oracle Corporation (NYSE:ORCL) taking the business back from the competitors. He said that there is a lot of competition and Oracle Corporation (NYSE:ORCL) has to crack a lot more deals than its doing now. However he said that the year on year growth has been better. Cramer said that Oracle Corporation (NYSE:ORCL) has been a buy on weakness several times and currently it’s in the same position. So Cramer feels that Oracle is buyable now as it’s weak on the market.
Disclosure: None
