Oracle's Q4 beats estimates

It looks like I was wrong.

When Oracle exceeded Wall Street expectations at the end of its third quarter, I speculated that Oracle might have done so by draining its sales pipeline for Q4. I based that on word I had heard of some extremely generous discounts that Oracle was granting to prospects that signed by the end of Q3. Such a move would deliver superior results for Q3 but risked pulling in sales that might have otherwise closed in Q4.

At the time I wrote that readers should check back in three months to see if I was right. Well, now it's three months later and Oracle has announced Q4 new license sales that are 17% higher than the same quarter last year. That's well above Oracle's forecast of a 5-15% increase. Revenue overall rose 20%, and net profit jumped 23%. Impressive results all around.

So, what's going on? Catz attributed Oracle's success to execution, which is no doubt true. But it also confirms Oracle's strategy, in which it has been able to integrate a string of software acquisitions into its operations without losing customers. It also is showing momentum against its chief rival, SAP--a fact which it continues to promote on its website.

Oracle is now forecasting a whopping 20-30% increase in new license sales in its for its first quarter, which would include revenues from new acquisitions Hyperion and Agile Software.

The Wall Street Journal has more on Oracle's Q4 results.

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Malware damages fall to $13.3 billion annually

Over at Computer Economics, we've just released our latest annual Malware Report. Included in the report, is our estimate of annual worldwide direct cost to business of malware attacks, where we report that such damages fell to $13.3 billion last year, from $14.2 billion in 2005.

We attribute the drop in direct cost damages to two factors, one good, one bad.

• The good factor is that, in our estimation, the antivirus vendors do a pretty good job of thwarting malware attacks before they can become the massive worldwide storms that organizations experience in previous years. It's been some time since we've seen an attack like the Love Bug in 2000, or even MyDoom, Netsky, or Sasser in 2004.

• The bad factor is that much of the drop in direct damages has to do with the changing nature of malware. Malware authors these days aren't writing viruses, worms, and trojans primarily to cause damage, but to make money. To make money, you don't damage the host computer--you keep it running to serve as a spam proxy, or to perpetuate click-fraud, or to steal confidential information, for example.

Therefore, direct cost damages may be declining but indirect and secondary damages are increasing. Follow the links below for further discussion of the implications of this point.

The full report, entitled, 2007 Malware Report: The Economic Impact of Viruses, Spyware, Adware, Botnets, and Other Malicious Code analyzes the cost of malware at the worldwide, organization, and event level.

An extended description of the report is available, as well as a more complete excerpt, on the Computer Economics website.

Oracle now charges SAP with copyright violation

Right on schedule, Oracle has amended its complaint against SAP and its third-party support unit, TomorrowNow (TN). (You can read the background on this case in my original post on the subject, and also developments prior to today in my post earlier this week.)

In its amended complaint, Oracle is adding copyright violation to its previous charges of theft of intellectual property. At the time of the original filing, Oracle had not registered the copyright for many of the support materials. It has since done so and is now suing for additional damages under U.S. copyright law.

In its amended filing, Oracle gives one interesting example of TN's copyright violations.

86. The DST Solution. In at least one instance, SAP TN has also, publicly displayed, distributed, and thereby profited from Oracle’s copyrighted Software and Support Materials. In December 2006, Oracle developed a knowledge solution related to the recent early change to Daylight Savings Time (the “DST Solution”). The DST Solution is a narrative document with specific instructions for how to conform certain Oracle software to the new Daylight Savings Time change. Oracle fielded more than a thousand service requests from its customers related to the Daylight Savings Time change, and its DST Solution helped resolve more than 750 of them.

87. Oracle traced downloads of the DST Solution to SAP TN’s IP address on January 8, 2007 and January 15, 2007. Oracle also noticed that SAP TN posted a “PeopleSoft Daylight Savings Time solution” on its website. SAP TN’s “solution” is substantially similar in total–and in large part appears to be copied identically from–Oracle’s DST Solution. SAP TN’s copied version even includes minor errors in the original DST Solution that Oracle later corrected. SAP TN’s version also substitutes an SAP TN logo in place of the original Oracle logo and copyright notice.

88. Oracle has registered the downloaded version of its DST Solution that SAP TN copied and created derivative works from, and later distributed and publicly displayed, as well as a later version that SAP TN also downloaded shortly before Oracle filed its original Complaint, Registration Nos. TX 6-541-019 and TX 6-541-018. No customer is licensed to create derivative works from, distribute or publicly display Oracle’s Software and Support Materials, and neither is SAP.

If this case involved anyone other than SAP, it is likely that upon discovering this activity, Oracle would have notified the offending party to cease-and-desist.

As I noted previously, Oracle's earlier allegations of excessive and improper downloads might be explained by a TN consultant simply trying to work efficiently, using a single customer's user credentials to download materials for multiple customers.

The copyright infringement allegation, though, is harder to explain--essentially republishing an Oracle document, including errors, with an SAP logo. If true, TN has really handed Oracle a big club to use against SAP.

SAP denies any wrongdoing and promises to vigorously defend itself. It has until July 2 to respond.

Oracle has a special SAP lawsuit webpage with all related documents.

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