Oracle (ORCL) has repeatedly made excuses for falling short of earnings estimates, often blaming the global economy for its suffering. However, growing evidence suggests that its problems are rooted in the company's own failure to compete with rivals like SAP (SAP), the loss of a key IT partner Hewlett-Packard (HPQ), and a hardware business that is constantly causing problems.

Analysts worry that that Oracle's $5.6 billion purchase of Sun Microsystems has turned into a liability, as sales have fallen short of expectations. Even Oracle's business management software has been slow to take off since its 2011 release.

However, Oracle's rivals, SAP, IBM (IBM), Salesforce.com (CRM), and VMware (VMW) are not feeling the heat. Rather, these companies all recently released strong results and bullish outlooks. Investors are now questioning Oracle's strategy.

Analysts perceive the world's third-largest software maker as a company with "issues." These issues are reflected in its stock price, which has gained just 3% since the company reported quarterly results in December, compared to the Nasdaq's 17% rise in the same time.

Some analysts ardently believe that Oracle's decision to buy Sun Microsystems undermined sales of CEO Larry Ellison's software because it put Oracle in competition with hardware makers. Oracle had no business entering the hardware industry, they contend. Many hardware makers like Hewlett-Packard, IBM, and Dell (DELL) are now putting less effort into selling Oracle products.

HP is a primary reason for this problem, with the two companies filing lawsuits against each other over Oracle's decision to stop producing software for high-end HP computers. While Oracle was too busy sorting out its HP drama, rivals were preoccupied with getting ahead in the industry.

SAP has been working on a new specialized database called Hana that pulled in $208 million in sales in its first two quarters on the market. SAP has packaged the technology with IBM  as a product to help businesses and companies analyze large quantities of data. Oracle has developed a similar product called Exalytic to be launched this month. If Hana is accepted as an alternative to the Oracle database, that could mean a lot of trouble for Oracle's sales. Even worse, Oracle could have to resort to price slashing to compete. Hana poses as a serious threat for Oracle.

Some Wall Street analysts are not concerned about another earnings miss. They are convinced Oracle is skilled at managing the bottom line. Several analysts expect the company to meet or beat modest expectations for its fiscal third quarter, ended February 29. Third-quarter revenue is projected to grow 2.5% from a year earlier to $9.02 billion. Wall Street analysts expect the company to post a profit of 56 cents per share, up from 54 cents a year earlier.

Diallah Haidar is a writer at Wall St. Cheat Sheet. As of this writing, she did not own a position in any of the aforementioned stocks.

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