REDWOOD SHORES, CALIF. -- Cloaked in his signature mock turtleneck and suitcoat,
didn't exactly evoke the image of a Borg leader. But as he ranted to the 200 attendees at Tuesday's
Analyst Day, the subtext was clear: Resistance is futile.
"Completeness yields simplicity," he said, beaming next to a 6-foot-tall panel of servers and components that he said housed the company's complete suite of Internet-based business software. "We will even deliver it to you in a box like this. All you have to do is plug in the wire."
It's that kind of almost-too-good-to-be-true simplicity that Ellison and Oracle have been trying to hawk lately, as the company's self-proclaimed transformation into an e-business has taken shape. Evidently the message -- replete as it is with car metaphors, un-ironic austerity pitches and the occasional inconsistency -- makes sense to investors bewildered by an increasingly wild tech market.
You can see that in the stock price. After a meteoric rise in which the stock has tripled since last October to trade at well over 100 times earnings, Oracle has held steady as other business-to-business stocks have sold off. For instance, the stock lost less than 2 points in Monday's tech bloodbath, when many of its competitors saw double-digit losses. And it finished down a scant 15/16 to 75 15/16 on Tuesday, after that session's truly scary trading pushed it into the mid-60s. Wednesday the stock was up 2.1% at 77 9/16.
"In terms of the completeness theme, it's certainly been something they've been driving home," said
analyst Jim Pickrel, who rates the stock a buy and whose firm has not done underwriting for the company. "And in fact, they probably have more claim to it than anyone else."
Pickrel's statement marks a notable change in the banter about the company over the past several months, as many analysts have been more than skeptical about Ellison's -- and Oracle's -- self-proclaimed oneness. But perhaps, judging by recent
comments, the pitch has started to work.
Drive My Car
See, there's an analogy floating around the executive suites of the mirror-wrapped office towers here. It goes something like this: When you buy a car, you don't buy it part by part -- say an axle here, a left rear bumper there. You buy the whole thing all at once and drive away. That, in essence, is what Oracle wants business to do when it comes to software purchases: Buy it all at once, buy it as a complete package, buy it from Oracle.
"We're not trying to build better camshafts, we're trying to build better cars," Ellison explained helpfully. "And you know what? Right now, it looks like we're the only
company that builds cars at all, and not just the parts."
That brings us to frugality. Oracle said it saved $1 billion in its most recent quarter, in large part by using the same systems that it is now trying to get other businesses to buy. That's another part of the Oracle message: Spend your money on us to help you save money on what you spend.
Of course, the twist is the venue from which the message is being delivered. The shimmering campus in Redwood Shores -- complete with its own parkway, volleyball courts and conference center -- is more reminiscent of a lakeside resort on the fifth planet of the Balzar system than of the headquarters of a down-to-Earth, cost-conscious company.
Back to Basics
Thus Ellison returned, once again, to his message of simplicity. Which was perfect, except that he contradicted himself in doing so.
His lack of clarity came in the service of explaining whether he thought business-to-business software providers, such as Oracle,
, could continue to take a piece of the transaction fees that are generated on the market exchanges their technologies power.
Ellison said, sure, Oracle can get fees, but that ultimately it prefers to simply sell software instead. "We're in the software business," he said. "You give us money, we'll give you software."
Yet just a few minutes earlier, he told this same audience that "the new shape of the software business is to be a service business."
That rang a little false in some quarters. "There's some inconsistency there," Pickrel said.
So Oracle and Ellison may not have achieved complete oneness after all. Which means that there still may be some room left for resistance, even if it's only among the Borgs' -- er, Oracle's -- competition.