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Open Source No Threat To Oracle Corporation, Deutsche Bank Says

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Open Source No Threat To Oracle Corporation, Deutsche Bank Says

Oracle Corporation (NYSE: ORCL) won't experience a risk any time soon from open-source software vendors, an analyst said Monday.

Deutsche Bank's Karl Keirstead said vendors, like privately held MongoDB Inc., "don't represent a near-term threat" to Oracle, which is set to post results Wednesday.

Open-Source Tech Threats?

Keirstead's analysis runs counter to a narrative presented Friday by Bloomberg, which said the threat to Oracle has been around for years, but has recently grown more intense as open-source technology becomes more reliable.

Bloomberg cited MongoDB as well as the startup DataStax Inc. among open-source database providers who are displacing business long held by Oracle, Microsoft Corporation (NASDAQ: MSFT) and International Business Machines Corp. (NYSE: IBM).

But Keirstead, who recently attended a MongoDB users' conference, said Mongo and its partners are "focused on empowering developers," rather than on signing large deals with corporations.

Related Link: Oracle To Report Near-Flat YoY Earnings?

Oracle Displacement Likelihood

For example, Keirstead said salesforce.com, inc. (NYSE: CRM)'s use of MongoDB in parts of its business "is not even close to displacing its huge Oracle database deployment."

"The near-term Oracle displacement risk seems modest," according to Keirstead, who said database demand, new Oracle products and a shift to subscriptions from licensing are of more near-term importance to the company.

Keirstead maintained a Hold rating and $44 target on Oracle.

Oracle Peers

MongoDB raised $80 million earlier this year, giving it a value of about $1.2 billion, according to the Wall Street Journal.

Last September, DataStax raised $106 million, giving it a value of about $830 million, according to the Journal.

As of last year, Couchbase Inc., which competes with MongoDB and
DataStax, had raised about $115 million although it declined to disclose valuation.

All three companies have said they will go public.

Image Credit: Public Domain

Latest Ratings for ORCL

DateFirmActionFromTo
Nov 2020KeyBancInitiates Coverage OnOverweight
Oct 2020UBSInitiates Coverage OnNeutral
Sep 2020RBC CapitalUpgradesSector PerformOutperform

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