Oracle Corp, the world's No. 3 software maker, lacks catalysts for growth as its integrated systems business is seeing slower-than-expected adoption and software unit is facing higher competition, Jefferies & Co said and downgraded the stock to hold.

The brokerage said Oracle's integrated database machines, Exadata, is losing momentum with enterprises and adoption of its database appliance product has not been as strong as expected.

In December, Oracle said second-quarter sales from its hardware products -- a weak spot in the company's otherwise robust business -- fell 14 percent to $953 million and forecast hardware revenue declines of between 5 percent and 15 percent.

Jefferies expects Oracle's database business to face increased challenges from rival SAP and other vendors like Salesforce.com and Workday.

Shares of Redwood City, California-based Oracle, which have gained 20 percent in value since December when it reported second-quarter results, closed at $30.13 on Friday on the Nasdaq.

(Reporting by Rachana Khanzode in Bangalore; Editing by Maju Samuel)

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