Enterprise applications Toolkit

Oracle starts SME push

Tags:
Small Business,
SME,
Mid-market

Matt Hines CNET News

Published: 17 May 2005 09:40 BST

Oracle announced on Monday new customers and partnerships in the midmarket business applications space, an effort some experts framed as a pre-emptive strike against similar news expected later this week from SAP.

Oracle named a handful of new customers — including companies from the manufacturing, insurance, high-tech and publishing sectors — that it has won over during the last several months with its Oracle Database Standard Edition One. The product is a version of the company's enterprise database software package that it has tailored and priced specifically to appeal to SMEs and to departments of larger organisations.

Oracle — which defines its mid-market customers by the size of their software projects, not their revenues — said its E-Business Suite Special Edition, an offering that comes with preconfigured business process tools for operations such as inventory management, purchasing and telephone sales, also continues to do well with midsize customers.

The company introduced 10 new channel partners that it has recruited to help sell its products and services into the sector, where such relationships are considered crucial for connecting with smaller customers. Among the new channel partners introduced by Oracle were BizTech, Corporate Solutions, Dataweb, Nascent and SOA Software.

In making the announcements, Oracle took direct aim at SAP, which is expected to detail its latest mid-market plans at its Sapphire conference, which begins tomorrow in Boston. Both Oracle and SAP have been pushing hard to increase their presence in the mid-market for years as demand for their powerful business applications has slowed among larger companies and increased among smaller concerns.

"We compete and win (against SAP) in the mid-market and have examples of where we've replaced them at long-time customers of theirs," said Frank Prestipino, vice-president of marketing at Oracle. "When people in this market dig deep with SAP they see it's too much to handle, and that's where we come in."

Prestipino said the most important element of Oracle's news is likely the string of partnerships. Midmarket customers continue to place nearly as great an emphasis on the quality of the software vendor's channel suppliers as they do on anything else, he said.

"(Partners) are probably the most essential part of our mid-market strategy, and we've been working hard to develop the channels in the most effective way we can," said Prestipino. "Progress has been great; we've got enormous participation of our long-time partners, and new people coming to us all the time, so we must be doing something right."

Industry watchers observed that competition between Oracle and SAP will only become more intense down the road. SAP is expected to make major mid-market strategy announcements at Sapphire, which could include a deal with another IT behemoth such as Microsoft. Oracle has a well-regarded distribution deal for database software with hardware giant Dell, and SAP may look to trump that relationship in the eyes of potential customers, experts said. SAP has its own deal with Dell to distribute server software.

Judy Sweeney, analyst with Boston-based AMR Research, said SAP could announce a new relationship with Microsoft along similar lines as the two companies' existing partnership — code-named Mendocino — through which the two are teaming to develop software that links SAP's business management systems more closely with Microsoft's Office suite.

"It could be a Mendocino for the mid-market," Sweeney said. "We will probably see something very much along the lines of SAP's enterprise partnership with Microsoft for ease of use."

For its part, Oracle is making it clear that it's already looking to add mid-market customers using the technologies it has acquired through its buyouts of rivals JD Edwards and PeopleSoft, Sweeney said. However, the analyst said Oracle will need to prove that it has made all of its applications easier to use and deploy if it is to continue to add customers in the mid-market space.

"E-Business Suite Special Edition has some real legs to it, it has a very nice implementation tool that partners are configuring for different industries, but Oracle is going to need to prove to customers that this is going to take more complexity away, which has been the biggest concern," she said.