Cisco grabbed Oracle Corporation’s (NYSE:ORCL) 4th Place in the Server Market

Oracle Corporation (NYSE:ORCL), the second largest company in the world when it comes to software programs, recently lost its 4^th place to Cisco in the serve market. According to the reports of International Data Corporation, the company that leads the server market is none other than Hewlett Packard. It is important to mention here that server market is worth around $50 billion. Hewlett Packard controls around 27 percent of the market share, followed by International Business Machines and Dell with a market share of 18 percent each.

Oracle Corporation’s (NYSE:ORCL) market share was at 4 percent. Cisco beat this share by 2 extra points; the fourth largest player in the server market grabbed a market share of 6 percent in the third fiscal quarter of the year 2014.

Oracle generates its revenues from its Hardware products segment, which comes under the enterprise servers. Enterprise server of the company is responsible for making 8 percent of the total revenues. Oracle Corporation’s (NYSE:ORCL) hardware product segment was previously split into many different segments. However, the company merged them into one big segment in 2008.

The company says that it is getting most of its revenues from the engineered systems segment for the last couple of years. As of now, this segment is responsible for generating around one-third of the total sales that the hardware products segment makes.

The defeat of Oracle to Cisco was quite expected, considering the recent trends that both the companies showed. In 2010, Oracle Corporation (NYSE:ORCL) bought Sun Microsystems and entered into the field of storage hardware and enterprise servers. The company made this acquisition due to the strong Solaris software and java base of Sun Microsystems. However, a little afterwards, Oracle closed down the OpenSolaris project of Sun Microsystems and turned its attention away from the x86 servers. The company focused on RISC microprocessors in order to generate more revenues, as this segment offered more prices, which meant that the company can have high margins.

Sadly, this move of Oracle Corporation (NYSE:ORCL) did not go out as planned. The deliveries of RISC are in a decline whereas x86 is on a rise due to the lower prices. Due to this very reason, the company has been seeing a low growth for quite a while now.

Coming to the year to year revenue growth of software companies, Cisco is the only firm that has seen a 30+ positive growth in the last 4 quarters. Other tech giants, including Hewlett Packard, Dell and IBM, are struggling hard to keep their figures on the positive ends. For the most recent quarter of the year 2014, Cisco saw a yearly growth rate of 31.2 percent, followed by Dell and Oracle with figures standing at 9.5 percent and 3.4 percent respectively. The figures for IBM and HP were in negatives.

Coming to the stock prices of Oracle Corporation (NYSE:ORCL), the company is currently trading in the range of $39.92 and $40.78.