Re: The penny hasn't dropped yet...

From: joel garry <joel-garry_at_home.com>
Date: Fri, 5 Mar 2010 09:11:35 -0800 (PST)
Message-ID: <d595433c-063b-4768-a961-246a693d3dc0_at_k5g2000pra.googlegroups.com>

On Mar 4, 6:41 pm, Noons <wizofo..._at_gmail.com> wrote:
> On Mar 4, 11:41 am, joel garry <joel-ga..._at_home.com> wrote:
>
> > Not hardly.  There are presumptions there of equal footing that just
> > don't apply.  It seems apparent Oracle is well aware they can simply
> > wear down anyone who starts chest-thumping about lawsuits.  They
> > _should_ treat us as though we make the rules, but google "fire your
> > customers" which is making the rounds again thanks to Seth Godin.
>
> Interesting concept.  And one of the many reasons why we ghave a GFC
> that everyone knows how to correct and yet no one has been able to
> fix.  Somewhere in all that there is an element of reality missing...
>
> > More realistically, there are just so many customers that a few
> > squeaks are a cost of doing business.  Dropped penny?  More likehttp://www.youtube.com/watch?v=tAVYYe87b9w
>
> Yeah, I know.  But no matter how many companies Oracle buys to offset
> the lack of growth in DB business, there will be soon a day where
> reality will catch up.
>
> > > You bet.  And I can also make my next support payment dependent on
> > > Oracle changing their attitude.
>
> > As Rocky would say to Bullwinkle "that trick never works."  Bullwinkle
> > usually pulls out something likehttp://1.bp.blogspot.com/_F3F2-KgbhTc/SWAl_9WnUxI/AAAAAAAAAvM/ESUslxK...
>
> LOL!
>
>
>
> > But I suppose it's a nice dream.
>
> One that'll cost them a coupla hundred grand a year.
> And that's just one customer...
> ;)

Well, if you are going to spout reality and business and costs...

From http://www.oracle.com/corporate/investor_relations/earnings/10k-2009.pdf (sorry about formatting):

"Software license updates and product support revenues, which represented 50%, 46% and 46% of our total revenues in fiscal 2009, 2008 and 2007, respectively, is our highest margin business unit. Support margins during fiscal 2009 were 84%, and accounted for 81% of our total margins over the same period."

...

"In connection with the purchase price allocations for our acquisitions, we estimate the fair value of the support obligations assumed. The estimated fair value of the support obligations is determined utilizing a cost build-up approach. The cost build-up approach determines fair value by estimating the costs related to fulfilling the obligations plus a normal profit margin. The estimated costs to fulfill the support obligations are based on the historical direct costs related to providing the support services and to correct any errors in the software products acquired. The sum of these costs and operating profit approximates, in theory, the amount that we would be required to pay a third party to assume the support obligation. We do not include any costs associated with selling efforts or research and development or the related fulfillment margins on these costs. Profit associated with any selling efforts is excluded because the acquired entities would have concluded those selling efforts on the support contracts prior to the acquisition date. We also do not include the estimated research and development costs in our fair value
determinations, as these costs are not deemed to represent a legal obligation at the time of acquisition.

As a result, we did not recognize software license updates and product support revenues related to support contracts in the amounts of $243 million, $179 million and $212 million that would have been otherwise recorded by the acquired businesses as independent entities in fiscal 2009, 2008 and 2007, respectively."

...

"(Dollars in

millions)                                                    2009

Actual Constant 2008 Actual Constant 2007  

Percent Change Percent Change
Year Ended May 31,
Software License Updates and Product Support Revenues:
Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,462 16% 18% $ 5,587 19% 17% $ 4,698
EMEA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,850 10% 21% 3,503 32% 20% 2,653
Asia
Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,442 17% 20% 1,238 27% 18% 978
Total
revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,754 14% 19% 10,328 24% 18% 8,329
Expenses:
Software license updates and product

support(1) . . . . . . .                  1,075  9% 14%     987 19%
13%     831

Stock-based
compensation . . . . . . . . . . . . . . . . . . . . . . 13 35% 35% 10 -6% -6% 11
Amortization of intangible

assets(2) . . . . . . . . . . . . . . . .             841 41% 41%
596 27% 27%     470

Total
expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,929 21% 24% 1,593 21% 18% 1,312
Total
Margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,825 12% 18% $ 8,735 24% 18% $ 7,017
Total Margin
% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84% 85% 84%
"

So I'd say, if everyone (not an oracle employee) who posted at least twice on here in the last 3 years about any database stuff pulled a few hundred thousand dollars out of the stream - it _might_ click over one of the percents.

As they say, first you have to get the mule's attention. Gnats buzzing around don't.

But of course, Larry long ago recognized the maturity of the db market, that part of the revenue is just gravy. Like walking around drinking a container of KFC gravy (sorry for that obscure reference, heard routine on satellite comedy channel and mental image stuck).

jg

--
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because it is still a prototype, despite being in use since 2001 in
Toyota vehicles." - http://www.signonsandiego.com/news/2010/mar/04/ap-impact-toyota-secretive-on-black-box-data/

Received on Fri Mar 05 2010 - 11:11:35 CST