As far as technology companies go, Oracle Corp. (NASDAQ:ORCL) is among the oldest, and most established, in the database space. In fact, the company has been credited with the widespread adoption of relational databases nearly 50 years ago, showing just how valuable a first mover advantage in this arena has proven to be over time.
The company's overall business model continues to rely on Oracle's strong relational database business, with more than a third of the firm's revenue originating from this channel. Given the fact that the biggest of Oracle's customers are global players with significantly higher switching costs, most investors expect the company's market position to remain relatively stable over the long haul, great news for investors with long time horizons.
Oracle also happens to be very entrenched in its ERP business. The company has grown its market share in this arena organically and through a series of acquisitions, which has resulted in a high performance platform that handles a significant array of business functions for global clients.
The ability to create high switching costs and highly integrated products is one of the ingredients in the company's secret sauce, and is one of the reasons Oracle remains one of my top picks in the technology space for investors with long time horizons. The company's stock is expensive relative to years past, so I would caution investors to buy on dips moving forward.
Invest wisely, my friends.
