By Timothy Tow, Gartner Analyst
Oracle's earnings warning spotlighted an area in which the
company's applications unit needs to improve--selling to top-level
Oracle said that its shortfall in revenue stemmed from delays in the closing
of sales during the last week of its third fiscal quarter, ended Feb. 28.
Oracle usually turns in its second-strongest performance of the year in the
third quarter. This year's trouble may lead to a very deflated fourth
quarter as well--historically Oracle's strongest. As have many other
technology companies, Oracle finds that the economic slowdown in the United
States has affected its business, with many enterprises deferring purchasing
Postponements in purchases of applications will have longer-term effects
because rivals will get time to improve their competitive position against
Oracle. For example, new releases by PeopleSoft and J.D. Edwards will gain
traction during this time. The sales cycles for applications are notoriously
long, so customers have time to revisit their decision to purchase an
application--and do so, in many cases.
So for Oracle, delay will mean that it will have to re-engage even those
enterprises that have selected Oracle applications, despite its claims
Based on Oracle's comments regarding how planned purchases were lost over
the past week, the deals stalled while awaiting approval by top executives
in customers' organizations. This situation indicates that Oracle
Applications' strategy for selling its integrated e-business suite to CEOs,
CFOs and CIOs is not yet effective.
(For related commentary on Oracle and its Oracle9i database, see TechRepublic.com--free registration required.)
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