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September 30, 2005

Oracle versus SAP, Fri., Sept. 30, 2005, 2:42 PM

There seems to be a great debate over the biz plans of software giants Oracle and SAP. As a corporate user of database software, I always made the choice to go with the pricey Oracle. I used to hum the ‘sun-oracle-sun-oracle' mantra from morning til night. But these days, I don't have to make those decisions, so I just watch the stocks.

SAP (NYSE: SAP) yesterday reported good revenue growth and operating margins, mostly internally generated, and its stock has been doing well. Oracle (NDQ: ORCL), on the other hand, continues to look for acquisitions, but its currency has stumbled a bit.

I do agree that customers these days are looking to buy more product from fewer vendors, and so there will be industry consolidation. That trend most helps the Oracle corporate growth strategy. SAP much prefers to take the long road, building new products.

Therein lie the different faces of these two business software leaders. Oracle is the swashbuckling California acquisitor, and SAP is the stern-faced engineer from Germany. Btw, my wife calls me stern-faced, as in far too serious. :-)

I can just see the Oracle sales rep driving the flaming red Corvette pulling up to the stoplight next to his counterpart in the silver-grey Mercedes-Benz sedan.

Students and investment clubs occasionally write me to ask for comparative stock studies I'd recommend; SAP and ORCL would be a good one.

From the ADVFN comparative chart for 2005, you can see that ORCL has dipped recently, as did SAP early this year when ORCL was under promotion (during its acquisition run). ORCL might soon close the gap.

My main interest in showing you this chart is that you might want to use the same tool, and consider a pairs trade during flat trading markets some time. Comparative charts like this can be very effective.

One look at this chart appears to be an opportunity to buy ORCL (in black) and sell SAP (blue) " but that's your call. I just want you to see one of the tools that might be helpful.

Another tool is the Financial tab at ADVFN where you can enter the ticker symbols for SAP (see link) and then ORCL (link) to get a wealth of fundamental and fundamental info that could enter your decision.

Technically, it does appear that ORCL (12.50 bid) is the better bet than SAP (43.35 bid) right now.

Posted by Posted by Bill Cara on September 30, 2005 02:42:20 PM | Category: 45 Info Technology