Oracle and the Responsibility for Code
NEW YORK (TheStreet) -- One of the great stock market myths of our time is that Oracle (ORCL) made a great deal when it bought Sun Microsystems in early 2010.
Since then the value of Oracle has risen about 45%, sales are up by 63%, and profits are up 56%, on an annual basis. The market is offering a premium multiple of 16.44 for those earnings, against less than 12 for Apple (AAPL).
The belief is that since Oracle sells database software and high-end hardware to scaled enterprises, its earnings are more certain going forward than those of a mere consumer device maker, and Sun is a big reason for this.
But is it? Oracle's hardware sales are trending down, as noted in reporting on its most recent fiscal quarter by ITWorld. Oracle was not a hardware company before buying Sun.
Oracle's response is it also acquired key software assets with Sun. These included some of the "crown jewels" of the open source movement -- the mySQL database, the OpenOffice office suite, the OpenSolaris operating system, and Java, the write-once, run-anywhere computer language. How is that working out? Not so well. Monty Widenius, the outspoken mySQL co-founder, told The Register in November that Oracle is breaking its promises and, in the process, sabotaging his own open source fork of the code, called MariaDB. OpenOffice has been given over to the Apache Software Foundation after European developers became so angry with Oracle's management they created their own fork of the code, called LibreOffice. Last week I linked to former Sun evangelist Simon Phipps' story about efforts to fork OpenSolaris. But this is nothing next to what has happened with Java. Last week the U.S. Computer Emergency Response Team, or US-CERT, issued this release telling users to disable Java 7 in their browsers due to a security threat they could not find a way to fix. Criminals are already using the flaw to infect computers, as InfoWorld noted. Even the U.S. Department of Homeland Security is issuing warnings.Select the service that is right for you!
COMPARE ALL SERVICESAction Alerts PLUS
TRY IT FREEJim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
Product Features:
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Dividend Stock Advisor
TRY IT FREENew! $49.95/yr
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
Product Features:
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Stocks Under $10
TRY IT FREEDavid Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.
Product Features:
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts
- Weekly roundups
Real Money
TRY IT FREE24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
Product Features:
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
Real Money Pro
TRY IT FREEAll of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
Product Features:
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Options Profits
TRY IT FREEOur options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
Product Features:
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV
