Oracle shares /quotes/zigman/19452757/delayed/quotes/nls/orclORCL +0.93% were down more 3% after Morgan Stanley analyst Keith Weiss cut the Redwood City, Calif.-based company's rating to equal weight, telling clients in a note, "With its recent run, Oracle looks fairly valued given our lack of conviction around forward catalysts."
The shaky corporate IT market was a key factor, but Weiss
also pointed to problems on key markets, including enterprise software applications and hardware, and questions on Oracle's
ability to compete in a market where companies are turning more to vendors that offer less expensive alternatives.
Fusion Apps products, applications used by companies to perform a range of functions for running a business, which was supposed to be Oracle's big push into the enterprise software arena.
said, "While the base of Fusion Apps customers continues to build, our data points to both conversion rates and forward purchasing intentions weakening."
is also wrestling with the growth of cloud based software vendors, particularly players such as Salesforce.com
, which offer applications to businesses on a subscription basis, helping them avoid more expensive licensing deals offered by traditional software companies, such as Oracle
"Our survey indicates around 38% of Oracle customers already using Salesforce.com, up from 29% a year ago, with another 15% still looking to migrate or evaluate Salesforce.com in the near term, a sizeable figure given its existing scale," Weiss wrote.