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Oracle View Still Cloudy

Oracle's (ORCL - Get Report) strong third quarter showed the database giant is making the most of an expensive acquisition binge.

But as with Adobe's (ADBE - Get Report) solid results, Oracle's numbers left unanswered a bigger question: How strong is tech spending?

Solid performances by the two key software vendors, said Goldman Sachs analyst Christopher Sailer, shed little light on the state of information technology spending. Indeed, when asked on a conference call, Oracle CFO Safra Catz punted, saying, "We have great momentum going into the quarter."

Sailer said the strong showing by both companies may be more coincidence than bellwether for March quarter spending conditions. He sees Oracle benefiting from a rebound after a disappointing November quarter and anticipation of a seasonally strong May quarter, and Adobe enjoying pent-up demand for its next major product cycle.

The most positive development of the quarter was Oracle's unexpectedly strong showing on the applications side of the business. New-license revenue for application software grew by a very robust 57% to $423 million, well above analysts' expectations of about $368 million.

Oracle has spent more than $13 billion on a basket of applications vendors, including PeopleSoft, Retek, Siebel and, most recently, Hyperion (HYSL). Wall Street has been looking for signs that the huge expenditure is paying off. And it now appears to be doing so.

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