First, the database giant surprised the entire sector with its $2.1 billion acquisition of Acme Packet (APKT). Then, a little more than a month later, the company announced its intent to pick off network vendor Tekelec.
Although the Tekelec announcement didn't push the needle in terms of media attention, the move nonetheless demonstrates how serious Oracle is to differentiate itself from cloud rivals including Salesforce.com (CRM) and SAP (SAP). But perhaps more noteworthy is this deal signals the confidence of CEO Larry Ellison and Oracle's management team to go after telecom assets to combat (among others) Cisco (CSCO).
Given Tekelec's mobile traffic handling capabilities, Oracle now has ways to leverage Acme Packet's existing strengths in data control to service the needs of large telecom giants including Verizon (VZ). This was a space that was dominated by Cisco and Juniper Networks (JNPR). Not anymore.However, this has not stopped the Street from harping on Oracle's third-quarter earnings disappointment, which immediately sent the stock tumbling down 8% in March. Management said then the miss was due to struggles with sales execution. The company had hired new salespeople in the preceding quarters, many of whom struggled to close deals, resulting in the 1% revenue decline. It wasn't a good quarter, but Oracle's management didn't pretend it was, either. It's also worth noting here that the third quarter is historically Oracle's weakest. It certainly didn't help that the government cuts known as the sequester fell into that quarter. Investors, spooked by the results, sold off the stock fearing Oracle's near-term outlook despite margins remaining intact. Investors also discounted that Exadata, Oracle's intelligent storage server solution, which rivals competing products from EMC (EMC) and IBM's (IBM) SmartCloud, was up 82% year over year. I don't expect there will be any type of slowdown in the fourth-quarter earnings announcement due out Thursday. The Street is looking for a much improved performance. The consensus estimate is for earnings of 87 cents per share on revenue of $11.12 billion, which would represent revenue growth of just over 1%. These numbers seem very conservative to me, however. If my suspicions are correct that customers had postponed orders in the third quarter, I expect these orders will manifest themselves during this upcoming announcement. Follow @saintssense This article was written by an independent contributor, separate from TheStreet's regular news coverage.