The software giant is suffering through its worst year in a decade. Here's what went wrong--and what the company is doing to try to fix things:
Quality problems with Oracle 11i e-business software created an opening for rivals SAP (SAP) and PeopleSoft (PSFT). They grew by 17% and 19%, respectively, while Oracle's application sales were down 26% in the past year.
OUTLOOK: Oracle (ORCL) has sent out more than 5,000 fixes for the software to mollify customers. Prospects for growth are mediocre.
Revenues shrank 11% last quarter, and the company's core market for database software is only expected to grow 1.6% this year.
OUTLOOK: Oracle is beefing up its Oracle.com service for running applications for customers and delivering them over the Web. That should help, but it won't be enough to get revenues chugging again.
Chairman Larry Ellison forced out operations chief Raymond Lane, and three executive vice-presidents have left since June, 2000--representing a 25% turnover in the top ranks.
OUTLOOK: Ellison has tried to rebuild the team from within, but no one with Lane's operations skills and public credibility has emerged. Ellison needs more help.