Global CIO: Oracle Upside Earns Outperform Rating From Wells Fargo - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Cloud // Cloud Storage
07:02 PM
Bob Evans
Bob Evans

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.
1 of 2
Comment  | 
Print  | 
More Insights
10 Ways to Prepare Your IT Organization for the Next Crisis
Cynthia Harvey, Freelance Journalist, InformationWeek,  5/20/2020
IT Spending Forecast: Unfortunately, It's Going to Hurt
Jessica Davis, Senior Editor, Enterprise Apps,  5/15/2020
Helping Developers and Enterprises Answer the Skills Dilemma
Joao-Pierre S. Ruth, Senior Writer,  5/19/2020
White Papers
Register for InformationWeek Newsletters
Current Issue
Key to Cloud Success: The Right Management
This IT Trend highlights some of the steps IT teams can take to keep their cloud environments running in a safe, efficient manner.
Flash Poll