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Now Might Be the Time for Oracle

This should be an intriguing report from Oracle tonight after the bell, and potentially the best argument yet that this sleeper and not-so-gentle-giant is poised for a break-out.

As the key player in database software, Oracle is probably positioned better than anyone else as enterprise customers start to crack open their checkbooks again.

We've already gotten healthy outlooks from the likes of Cisco, Hewlett-Packard, Intel and Microsoft. A better comparison though might come from Oracle rival SAP which had a dismal quarter with software revenue down 30 percent year over year. The conventional wisdom on the Street is that SAP's problems are not systemic to the industry, but a direct result of losing share to Oracle. We'll see if that holds true when Oracle releases tonight.

Oracle has guided the Street to a software license decline of zero to 10 percent and 35 to 36 cents a share. Analysts though say that outlook is unrealistically pessimistic. An insider at Oracle reminds me also that it's been over a year since an Oracle acquisition, so any growth the company reports tonight is of the organic kind, and in a market and economy like this one, organic growth of any kind carries significance.

And a word about the company's play for Sun Microsystems. Oracle has essentially been given the green light by EU regulators to go forward with this long-delayed deal. There's a concern that there were some quiet, under-the-table negotiations that could be detrimental to the effectiveness of the final, merged company. I'd be surprised, given Oracle's stance that any material concessions were made.

Based on the rhetoric from both sides, and Sun's share price, it seems very much that this deal is done.

So with that in mind, now it's incumbent upon Oracle to communicate exactly how this deal will transform Oracle and what this company is trying to accomplish. There seem to be big changes afoot in not only how this company does business, but what businesses it plans to go after.

Some of this certainly has been priced into shares. But not all of it. Oracle is getting very interesting again.

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