Sunday, September 20, 2009

Mixed Software Report: Adobe and Oracle

Adobe and Oracle, two of the larger software companies, reported quarter results this week. Adobe (ADBE) was the weaker of the two, with revenue for its quarter ending August 28, 2009 (3rd fiscal quarter 2009) at $697.5 million, down 21% from $887.3 million year-earlier.

Oracle (ORCL), in contrast had revenues of $5.05 billion, down only 5% from $5.33 billion year-earlier.

The two companies are not, in the main, competitors. Adobe sells applications that are used for content creation (print, graphics, and video), and dominates that field. Oracle sells its database applications and related business management software. It competes mainly with IBM, Microsoft, and SAP, mostly successfully.

Adobe's slow sales mainly reflect the economy, not a loss of market share to competitors. Oracle has certainly gained market share this last year, allowing it to compensate for the slowed economy.

Both companies are involved with big acquisitions, which are always a danger for shareholders, but both have been successful with acquisitions in the past. Adobe is aquiring Omniture, a web analytics company. Adobe wants to build web analytics into its web products, and Omniture is a profitable business in its own right.

Oracle, in case you had not heard, is acquiring Sun Microsystems. It may not be able to keep all of Sun because of regulatory issues. A lot of people are afraid it will kill MySQL, the main open-source competitor to proprietory database applicatins. My SQL was bought by Sun not that long ago. The thing about acquiring Sun is that it has been years since Sun has made a profit. Sun, like IBM, is both a hardware and software company. Oracle appears to be wanting to add more hardware to its lineup. Hardware has low profit margins, but if you sell the hardware, you can usually sell software with it.

You can find out more at my Oracle Analyst Conference Summary for September 16, 2009 and my Adobe Analyst Conference Summary for September 15, 2009.

This week, a smaller but still-important software company reports: Red Hat (RHT) on Wednesday, September 23. You can visit my Red Hat Analyst Conference Summary page and bookmark it. I usually post my summaries by the end of the day the conferences occur, unless I have too much other work.

I don't own Oracle or Adobe stock at this time, and I sold my Red Hat stock recently.

Keep diversified!

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