The majority of Oracle's (
) revenue is generated by its software business. Oracle makes money
by selling crucial database, application, and middleware software
primarily to medium and large businesses worldwide. These three
types of software help in various stages of collection, processing
and storage of data.
Oracle mainly competes with IBM (
) and Microsoft (
) in the middleware software market. Middleware is a portfolio of
software products used to build and deploy software applications.
It acts as an interface between front-end, web-based applications
and back-end applications like the database. Oracle's popular
middleware tools include Oracle Weblogic Server, Oracle Tuxedo, and
Java Software (acquired through the Sun Microsystems
We maintain a
$38.16 price estimate for Oracle's stock
, roughly 20% ahead of market price.
Key Acquisitions (BEA, Sun) Have Lifted Oracle's
Until 2007, Oracle's share of the global middleware software
license market was around 8%. But after it acquired BEA Systems in
2008, its share doubled up, reaching 16% in 2009. Through
this acquisition, Oracle got BEA's popular product Weblogic
Application Server, a tool used for deploying Java-based enterprise
Another strategic acquisition by Oracle was of Sun Microsystems
in January 2010. This deal gave Oracle control of Sun's Java
programming, which acts as a base for most of Oracle's middleware
product suite. Oracle could re-engineer Java to enhance or further
develop its middleware portfolio, which would help boost its market
share in the long run.
While IBM competes with Oracle in the middleware market based on
industry standards, its middleware components are not as integrated
into a suite as are Oracle's. And Microsoft doesn't necessarily
adhere to the industry standard due to its usage of .net
architecture and C Sharp programming language. In this way, Oracle
holds an edge over its competitors in middleware offerings.
Given Oracle's improving share in the middleware software
market, we pose the following question:
What Percent of Oracle's Stock Value Comes from
Middleware Software Licenses?
Click a response above to see the answer
See our full analysis and $38.16 price estimate