How PLM Will Affect Oracle Corporation (ORCL)

Sure, SAP product Lifecycle Management application is used by more than 8,300 customers worldwide, but the company does not have a new product in this category to challenge Oracle’s this year. Though SAP is a threat with its cloud computing products, Oracle has a broader range of products and is winning the revenue race. I believe Oracle is the better buy here.

Dassault’s revenue results for the fourth quarter were in line with its expectations. Dassault saw revenue growth of 7% (IFRS) and 8% (non-IFRS) based on constant currencies. The company saw strong revenue growth of 14% in Asia. In North America, non-IFRS revenue jumped 9% year-over-year. Revenue from the company’s software segment jumped 8% (IFRS) and 9% (non-IFRS).

Dassault also competes with Oracle in the cloud computing space. Oracle acquired Taleo for $1.9 billion, but Dassault only paid $26 million for Netvibes. While the Taleo acquisition solidifies Oracle’s commitment to rapidly expand its cloud platform, the Netvibes should not be ignore by investors looking at these companies. In acquiring Netvibes, Dassault added social monitoring, analytics, and decision support capabilities into its PLM platform. However, Dassault is lacking a tool that can properly manage the ideation process. This is where Oracle wins out – looking at the social collaboration angle, bringing the Oracle Social Network to Taleo will be very enticing to customers. I believe Oracle is the better investment between these two companies.

Dassault has the V6R2013x in the market, but Oracle’s new products matches it in usability and efficiency. But Oracle does face significant challenges, including the potential for market share erosion from smaller, specialized companies such as Navatar Group, a provider of financial cloud computing solutions for Wall Street firms.

Conclusion

Looking at the new product releases in relation to their prospects and Oracle’s improving margins, I can safely say that Oracle is a good buy at the moment.

The article How PLM Will Affect Oracle originally appeared on Fool.com and is written by Maxwell Fisher.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.