Not many software companies can survive 30 years. But, that's what Oracle (NASDAQ: ORCL) has been able to do.

In fact, according to a cover piece in Barron's [a paid publication], it looks like the company may be poised for continued success.

The company's CEO and co-founder, Larry Ellison, is a legend in the software business. He has battled with biggies like IBM (NYSE: IBM), SAP (NYSE: SAP) and Microsoft (NASDAQ: MSFT). He has also conquered a variety of database operators.

But, Ellison has also been bulking up his company with savvy acquisitions, such as PeopleSoft, Siebel and BEA Systems (spending over $30 billion on dealmaking since 2005). Basically, he believes that business software is a fairly mature business and needs consolidation. What's more, the business is highly sticky. That is, once you implement an ERP system or database platform, it's pretty tough to make a change.

So far, the results have been solid. Over the past year, operating margins have gone from 36% to 42%. Then again, Oracle has benefited from economies of scale, such as with R&D, sales, customer support, and so on.

What's more, Oracle has lots of cross-sale opportunities. In fact, software licenses are up 29% to $4.4 billion. Keep in mind that this will be a source of future growth because of the ongoing maintenance fees.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Shares of Oracle Corp. (NASDAQ: ORCL) fell in after-hours trading after the software maker reported inline earnings, indicating a slowdown in technology spending by businesses.

Net income rose 30% to $1.3 billion, or 30 cents per share, on revenue of $5.3 billion, according to the earnings press release. Analysts were expecting profit of 30 cents on revenue of $5.42 billion, according to Thomson Financial.

Until now, Wall Street was in love with the stock, sending the shares up about 13% this year at a time when many big-cap tech stocks have done poorly. This is the type of company that has conditioned investors to expect continued outperformance.

In fact, Bloomberg News went so far as to note: "Oracle Chief Executive Officer Larry Ellison, who led the software maker on a $33.5 billion spending spree, did more than add 39 businesses and 20,000 customers. He bought armor against a U.S. economic slump."

Guess that armor has some kinks in it now.

Tonight's conference call should be lively. The stock will fall even further if the company's guidance isn't extraordinarily optimistic.

The folks at NetSuite (NYSE: N) certainly have good timing. They were able to launch their IPO late last year – before the equity markets came undone.

Now, the company has released its first quarterly report as a public company. Q4 revenues spiked 57% to $31.7 million and there was a net loss of $3.3 million, which was much better than the loss of $8.1 million in the same period a year ago.

NetSuite, which is majority-owned by Oracle's (NASDAQ: ORCL) Larry Ellison, is a provider of web-based business applications. Think of it as filling the gap between Intuit's (NASDAQ: INTU) QuickBooks and mega applications from SAP (NYSE: SAP) and Oracle.

And, it's a big market opportunity. In fact, NetSuite often says that it is focused on the "Fortune Five Million" companies.

But, as is the case with other web-based providers, there is some uncertainty in the marketplace. While NetSuite isn't seeing a fall-off, the company is still providing in-line guidance – with a full-year revenue projection of $153 million to $156 million, which is a 44% increase (on the top end).

Keep in mind that NetSuite had to deal with the severe tech recession of 2001-2002 and was able to actually thrive in the environment. A key reason is that companies were looking for cost-effective solutions.

In today's trading, NetSuite's stock is down 5.62% to $22.17.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

Ah, rumors. The stuff that makes stocks go up and down. At least juicy rumors keep things interesting.

There is some chatter in the blogosphere emanating from SiliconValleyWatcher that enterprise database vendor, Oracle Corp. (NASDAQ: ORCL) may be in the process of scooping up upstart Salesforce.com (NYSE: CRM). Not only is SVW hearing this from a reliable source but it appears the buyout may come at a very large premium -- 50% over CRM's share price today.

I feel like this tie-up has been telegraphed from the inception of Salesforce.com as an organization. Salesforce.com plays in the SaaS (Software as a Service) space, effectively letting both large and small sales organizations rent the software that manages their sales pipelines.

I've written about SaaS vendors previously and how they harbinge the future of the software industry. Combine a pay-as-you-go model that addresses the long tail of small businesses with the sales prowess of an Oracle at the Fortune 500 level and you have an extremely interesting M&A.

As SiliconValleyWatcher posits, it's going to come down to numbers. Salesforce's effervescent (understatement) CEO, Mark Benioff, came out of Oracle and could play the role of Larry Ellison's successor. Benioff knows he has some great assets and is looking to best capture their value.

Is Oracle going to pay up?

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund. Author holds no position in the stocks mentioned.

Oracle Corp. (NASDAQ: ORCL) will be buying competitor BEA Systems, Inc. (NASDAQ: BEAS) in a deal worth about $7.85 billion, both companies announced early this morning. BEA makes software that connects Oracle's market-leading database software to the vast array of business software applications that millions of workers use daily.

Although there had been some dispute over the value of BEA in recent months, the $8.5 billion deal does give a 24% share premium to Tuesday's closing price of $15.58 for BEA common shares. This morning, however, BEAS is up more than 18% at $18.45 on the takeover news. Activist investor Carl Icahn even blessed the merger by saying he would vote his 13% BEA stake in favor of the combination: "This transaction is an excellent example of the great results that can be achieved for all constituencies when the shareholder activist is able to work cooperatively with management."

Oracle, the world's second largest software maker after Microsoft Corp. (NASDAQ: MSFT), was interested in BEA back in October of last year, but the company rejected its offer of $17 per share (total value: $6.7 billion). The latest offer from Oracle, which is pegged at $19.375 per share, won unanimous approval from BEA's board of directors. Oracle's continuation of billion-dollar acquisitions of late have added some pretty decent heft to its offerings. The company has acquired competitors PeopleSoft, Siebel Systems and Hyperion Solutions -- and now, BEA.

[The author holds a long position in MSFT]

With the announcement that Starbucks (NASDAQ: SBUX) chairman and founder Howard Schultz is re-assuming the role of chief executive officer, it gets real interesting. Why?

Founders know the vision and the dream better than anyone; after all, it was their idea. The landscape is littered with founders returning to the CEO role. Larry Ellison has done so with Oracle (NASDAQ: ORCL), Michael Dell has come back to Dell (NASDAQ: DELL), and perhaps the most successful, Steve Jobs of Apple (NASDAQ: AAPL). The founder of an enterprise typically has the passion and the vision to where the enterprise should be. The problem with founders is that they normally are not great managers.

Steve Jobs of Apple had to actually get fired from Apple, found Pixar, develop it and eventually sell it to Disney (NYSE: DIS) before he learned the necessary lessons to bring Apple back. His record of accomplishment will be the subject of MBA course studies, and maybe even psychology books!

With Dell, the jury is out, both on him and the company. I don't like Dell, the company, and could not understand Wall Street's enthusiasm in 2007. Dell's business is characterized by depressing margins -- never a good sign -- and Hewlett Packard (NYSE: HPQ) controlling both margins and the market share. Dell may never come back, at least not the way it is structured now.

Ellison at Oracle has acquired growth through depressed, but smart acquisitions, to build the applications business around its core database business.

And Howard Schultz at Starbucks?

Over the past couple years, I've met with Zach Nelson several times. He's a veteran of the software world and is currently the CEO of NetSuite (which starts trading tomorrow as NYSE: N). The company develops on-demand software for the small-to-mid size business (SMB) segment, essentially allowing for sophisticated enterprise resource planning (ERP) functionality at affordable pricing.

Despite the success of NetSuite, it has been in the shadows of mega player, Salesforce.com (NYSE: CRM).

But this may change; that is, today NetSuite had a successful IPO, raising $161 million. At first, the company had a $13-$16 price range on the offering, but was able to price the deal at $26. NetSuite used an online Dutch auction system for its IPO, which allows any investor to participate.

The ERP market for large businesses is mostly dominated by SAP (NYSE: SAP) and Oracle (Nasdaq: ORCL). However, the SMB market is fairly under penetrated (Nelson calls it the "Fortune Five Million").

It was a tough time in 1977. There was inflation, unemployment and political turmoil because of Watergate.

But such things didn't mean much for a group of programmers -- Bob Miner, Ed Oates, and Larry Ellison. They started a database software company called Structured Development Laboratories. Of course, the company would eventually be renamed Oracle Corp. (NASDAQ: ORCL) and grow into a multi-billion dollar powerhouse.

Well, this week at the popular Oracle OpenWorld conference, Larry devoted his keynote to the early days of the company (the picture on the upper right is the original 900-square foot office location).

Traditional software companies are scrambling to deal with the Internet. Take Adobe Systems Incorporated (NASDAQ: ADBE), which is ramping its on-demand offerings.

In fact, today the company announced that it has snapped up Virtual Ubiquity. The company operates Buzzword, which is a web-based word processor and collaboration platform. The financial details were not disclosed.

It certainly helped that Buzzword has adopted a variety of Adobe technologies, such as Flash and Flex. Interestingly enough, Adobe invested in the firm a year ago.

So is Adobe trying to take on Microsoft Corporation (NASDAQ: MSFT)'s Office? Actually, I don't think so. Hey, if anything, Adobe understands Microsoft very well – and also realizes that there is still a lot of opportunity in the graphics/design market. Instead, I think Adobe is trying to use new technologies to improve its core strengths.

I had a chance to talk to Frank Zamani, who is the CEO of Caspio (which operates an on-demand web application platform). According to him:

"As Oracle Corporation (Nasdaq: ORCL)'s Larry Ellison says, in the future there will be only a handful of very large software companies. Adobe is certainly going to be one of them. According to Triple Tree, the SaaS (software as a service) market by 2009 will be 40% of the software market. The question is whether Adobe is going to leverage its fantastic brand name to expand into SaaS. This acquisition demonstrates that they are thinking in that direction. It will be interesting to watch if they will stick to document management or embark on a broader SaaS strategy."

Also, if you want to check out other acquisition deals, click here.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements.

Not that long ago, on-demand software was considered a niche. Would real businesses use the Internet for their software needs? As seen with the stellar success of salesforce.com, inc. (NYSE: CRM), on-demand appears to be the next-big-thing and today another big player in the space filed to go public: NetSuite.

Founded back in 1998, NetSuite has built a comprehensive offering of on-demand applications for small and medium-sized businesses – such as ERP (enterprise resource planning), CRM (customer relationship management), and e-commerce. It means competing against rivals like Microsoft Corporation (Nasdaq: MSFT) and SAP AG (ADR) (NYSE: SAP).

The software is sold on a subscription basis and is fairly easy to use. Its getting traction. From 2004 to 2006, revenues increased from $17.7 million to $67.2 million. I suspect the growth will continue its ramp.

Interestingly enough, the biggest shareholder is Larry Ellison, who is the cofounder and CEO of mighty Oracle Corporation (Nasdaq: ORCL).

The underwriters include Credit Suisse Group (ADR) (NYSE: CS) and W.R. Hambrecht. You can find the prospectus at the SEC website. And if you want to see more recent IPOs, you can click here.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Cross-selling opportunities from vertical application acquisitions should drive Oracle Corporation's (NASDAQ: ORCL) stock higher.

Specifically, in last night's earnings conference call, management discussed how its business relationship with Wal-Mart Stores Inc (NYSE: WMT) has expanded. Prior to making an acquisition in the retail applications space, Oracle, believe it or not, did no business with the retailing giant. Today, however, the software company is cross-selling its broad product offerings to Wal-Mart. Management suggested the same is true for other verticals such as communications and healthcare, where Oracle has recently completed acquisitions.

Also impressive was Oracle's margin expansion, as operating leverage kicks in from over 30 acquisitions that are being integrated. Ellison expects acquisitions to continue, with five having been announced the past quarter, he sees no reason to slowdown.

Guidance was also strong with new software license revenue expected to be up 20 to 30% year-over-year. Total revenue is forecast to grow 19 to 21% on a GAAP basis.

The Oracle cash flow and acquisition machine is surging forward and it appears its stock will do the same. Somehow Oracle has put together a very unique ability to successfully integrate a massive number of acquisition unlike any other company has done before.

Since its upside surprise when it reported last quarter, enterprise software giant Oracle Corp. (NASDAQ: ORCL) has continued with its philosophy of growth through acquisition by acquiring LODESTAR Corp., which supplies software solutions to utilities, as well as product lifecycle management leader Agile Software Corp. (NASDAQ: AGIL). And the share price has been trending upward the past three months.

But it hasn't all been peaches and cream. Billionaire George Soros recently shifted his focus away from Oracle and some other tech stocks in favor of Microsoft Corp. (NASDAQ: MSFT). BloggingStocks contributor Georges Yared thinks Oracle's glory days, in terms of growth, may be behind it, and even that it may be a stock for suckers.

Oracle's rivalry with Germany-based SAP AG (NYSE: SAP) continues, of course, not only in the courtroom -- Oracle recently added copyright infringement to its theft charges against SAP -- but also into small and medium-sized companies, where some early indicators suggest Oracle may have the edge. Oddly enough, there has been speculation that Oracle may try to acquire SAP, unlikely though that may be, after it was rumored that Oracle has been purchasing SAP stock.

But Oracle remains part of the Fortune 500, and BloggingStocks contributor Brent Archer thinks the stock might be a bargain. One analyst upgraded Oracle just last week. According to Thomson Financial, Wall Street consensus rates ORCL a buy (12 strong buy, 11 buy, 12 hold). When Oracle reports earnings on June 26, analysts expect earnings per share for this quarter to come in at 35 cents, compared to 25 cents actual from last quarter, and 25 cents a year ago. Its market cap is $96.8 billion, and its P/E ratio is 18.95 (the industry average is 23.49). The consensus price target is $21.25; the 52-week low was $13.77 in July of 2006 and $19.95 last week. It closed Tuesday at $19.88.

Oracle Corporation (NASDAQ: ORCL) reported blow-out results once again. If you own Oracle, stay with it; if you do not own Oracle, I'd buy it.

We have been blogging for most of 2006 that Oracle's acquisition strategy is working and would be proven out by reporting great results -- which has come true. We first blogged about buying the stock at $14; it is now at $18, up close to 30%.

Ellison said during last night's conference call that Oracle is growing six times faster than SAP's new licenses. Ellison also began pounding the drum on how it is beating BEA in the middleware market.

Ellison's strategy of providing ERP, CRM and industry specific software is working big time.

Oracle is selling for 18x for FY2007 earnings and 15.4X FY2008 earnings, so Oracle is still a cheap stock. Stay with this stock, there is much more upside coming from earnings growth and potential for P/E expansion.

SAP AG (NYSE: SAP), which warned earlier in the month, made comments in yesterday's Q4 earnings conference call point to Larry Ellison's prognostication of SAP's demise being more and more correct.

Back in September, after reporting a blow-out quarter, Oracle Corporation's (NASDAQ: ORCL) Ellison said SAP is a number of years behind. Ellison went as far to say that if Oracle doesn't screw up, SAP is in big trouble.

Since Ellison made those comments, more and more evidence is coming out supporting his view. Since late 2006, SAP has reported poor results and IBM has reported weak results in businesses that work closely with SAP.

SAP said it is going to spend an extra 300 to 400 million euros over the next eight quarters for new software development. This further supports Ellison's claim of SAP beginning behind the curve.

Oracle's stock had a good year in 2006 with industry spending in a lull. But now it appears the lull is over and Oracle could be off to the races again.

Before the U.S. market closed yesterday, SAP AG (NYSE: SAP), the German-based software giant, reported a big miss with the stock dropping over $5 in the last hour of trading.

Oracle Corp's (NASDAQ: ORCL) revenue also came up soft in its last quarter, but not as soft as SAP's. Meaning: I'd stay with Oracle and avoid SAP. Oracle's numbers were better, but more importantly, it appears its strategy of bringing together high-end vertical software applications through acquisition is right on target.

In a September earnings conference call, Oracle CEO Larry Ellison all but said goodbye to SAP. Ellison said that SAP is at least two years behind Oracle and suggested that if Oracle did not make some big missteps, it would be tough for SAP to catch up. It appears from SAP's results, that Ellison's comments might have some truth to them.

Price weakness in Oracle's stock might be a good buying opportunity. While Oracle reported a weak quarter, it appears the economy and corporate spending are fine. That means spending should pick up for Oracle's products during the year.