Oracle Revenues: Implications for HP and IBM

September 17, 2015

Oracle is an interesting company because it owns a number of enterprise search and content processing technologies. For example, decades ago, the company bought the often overlooked Artificial Linguistics. Then Oracle complemented its “Text” and “Secure Enterprise Search” technology with Triple Hop. Gentle reader, I am confident you know about Triple Hop’s clustering methods. Then in a spate of content processing fury, Oracle bought RightNow (Dutch developed indexing technology), InQuira (natural language processing crafted from two early Sillycon Valley search vendors), and Endeca, the now long in the tooth, computationally intensive “Guided Navigation” outfit. And we must not forget the retrieval functions of PL/SQL. Oracle has almost as many search and retrieval systems to nurture as that high flying OpenText outfit in Canada.

With such a backpack of information access goodies, should we expect a revenue report bursting with good news? It struck me as I read “Oracle Beats Profit Estimates by a Penny a Share but Revenue Slides” that search and retrieval may not be a zoo with golden geese.

Oracle delivered earnings which made the fine Wall Street MBAs glow. However, the revenue did not win a gold star.

Set aside Oracle for the nonce.

Think about Hewlett Packard (Autonomy stuff) and IBM (Watson stuff). Both of these outfits are reporting declining revenues too. Both have bet large sums on information access.

My question is, “Will a payoff arrive?”

My other question is, “When the payoff arrives, will it make up for the loss in revenues from old line products and services?”

My hunch is that these big bets on search are current and future ponds of despair.

Now set aside these floundering blue chips.

What about the up and coming search vendors? Life is not easy for vendors of search and content processing technology. There are some bright spots, of course, but vendors with deep roots in traditional search craziness are likely to find revenues insufficient to pay for customer support, bug fixing, and implementation of new technical methods.

Google before its founders did an arabesque into Alphabet figured this out with the high interest credit card of technical debt. When will HP, IBM, and Oracle get the message?

Stephen E Arnold, September 17, 2015

Written by Stephen E. Arnold · Filed Under Enterprise search, Financial, News, Search

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Stephen E. Arnold monitors search, content processing, text mining and related topics from his high-tech nerve center in rural Kentucky. He tries to winnow the goose feathers from the giblets. He works with colleagues worldwide to make this Web log useful to those who want to go "beyond search". Contact him at sa [at] arnoldit.com. His Web site with additional information about search is arnoldit.com.