Most of ORCL's revenue comes not from sales of licenses for their software but for providing support and consulting services to these companies. It had been a good business and it seemed to have a lot more growth potential. The applications market is considered particularly important as sales of the applications are driving sales of the database software. In the database market, the new version of ORCL's principle product, Oracle 8, is facing slow sales, in part, apparently, because Oracle 7 had so many bugs that customers are holding off, waiting for any bugs in this version to be fixed. There is also the problem of product saturation.
Companies have enough databases.
Slow sales to telecomm customers was a part of this quarter's shortfall. Now let's look at the numbers, or rather the new numbers based on the most recent analysts' estimates of earnings. Company Year Ended EPS PE PS LTGR PEG Market Cap. At first glance, ORCL appears to be trading at a discount to LTGR, but I don't think that LTGR represents current thinking any longer. Current trailing PE is 24.7, above the market average.