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February 27, 2000
Last Friday was a monumental day in business and Oracle (symbol ORCL) was right smack in the middle of it. On February 23, 2000, General Motors, Ford Motors and DaimlerChrysler announced a joint venture to build a network to streamline business with all their different suppliers. The so called "walls of competition" crumbled as they jointly agreed to transact a combined $240 billion in spending with suppliers through a single portal. This single portal will be made possible through the efforts of both Oracle and Commerce One (symbol CMRC). They will be responsible for developing and maintaining the site and will each have an equity stake in the venture and possibly share in the revenues. There is no denying that Business-to-Business ("B2B") e-commerce is here to stay and Oracle intends to be in the front leading the charge.
Oracle currently holds the position of the world's second largest software company. Oracle develops, manufactures, markets and distributes computer software that helps corporations manage and grow their business. They also offer consulting and systems integration services. Oracle offers three primary products: 1) server technologies, 2) applications development and 3) business intelligence tools.
Although Oracle's earnings are currently projected to grow at about 25% per year for the next five years, the road to success has not always been smooth for the software giant. Over the last year, Oracle has climbed from a low of around $10 (April 1999) to a high of $71 on Friday. Oracle has had to struggle through a few disappointing earnings announcements and the negative sentiment towards enterprise resource planning ("ERP") software companies. Luckily for Oracle, its CEO, Larry Ellison is focused on the future and doesn't dwell on their past disappointments. Oracle's recent success is largely due to Larry Ellison's ability to identify future trends and to quickly redirect this behemoth company into more profitable areas.
It looks like Larry Ellison sees another trend developing and is nimbly moving into that space – wireless applications. On February 22, 2000, Oracle unveiled Oraclemobile.com (web site is currently Oramobile.com), a new wireless portal designed to gather many popular web destinations such as Amazon.com, E-Bay and E-Trade under one roof. Together with Motorola, they are creating a wireless web experience that will be easier to navigate, will utilize voice recognition software and other user friendly technologies.
As with most cutting-edge technology companies, Oracle is stepping into uncharted waters and the end result, either profitable or unprofitable, is still unknown. However, investors interested in participating in the potential B2B and wireless explosion should keep a close eye on Oracle – you may get a glimpse of the future.
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