For the most part Oracle watchers have been obsessed with the question of how fast and how much of the company’s business can move to the cloud. But a larger and more central threat is growing that is focused on Oracle’s financial crown jewel, the software maintenance and support revenue that make up about 50 percent of its $38 billion in annual revenue.
If Oracle cannot move its business to the cloud, then its future as a growth stock, or at least as a stock with prospects for modest growth, will be severely called into question. But, if a new collection of competitors offering third party support can actually make a dent in Oracle’s software maintenance and support revenue, then even Oracle’s future as a dividend stock could be cast into doubt.
Of course, the scenarios that are putting pressure on Oracle won’t play out in a quarter or two, but if evidence grows that Oracle now must fight two wars, one to move to the cloud and another to maintain its support and maintenance revenue... Continue reading