Enterprise applications Toolkit

Oracle sheds light on its acquisition strategy

Tags:
Acquisition,
JD Edwards,
ERP

Colin Barker ZDNet.co.uk

Published: 06 Mar 2008 15:59 GMT

...teamwork and development, and we put a lot of store behind making sure that we are coaching people from a career point of view; it is not just performance-related.

So, explain a little about how these acquisitions are being developed and moved forward.
The first one we did was JD Edwards and PeopleSoft. JD Edwards had been taken over by PeopleSoft the year before and their people felt pretty aggrieved. That was the first one and we didn't do as much as we needed to do at that point in time. We were a bit new.

Where we are now is that we have listened to the users. The user-group survey has gone from saying the PeopleSoft and JD Edwards customers are the least happy to [them being] the most happy. That is for three basic reasons.

Firstly, we have released versions of every product. We released new versions of PeopleSoft; new versions of JD Edwards EnterpriseOne; but also the first release of JD Edwards World since 1998. So they have seen that the company is serious about investing in those products.

Then we picked up on the fact that they were less happy than the Oracle customers and we focused people on resources and programmes — so on changing that [perception] and listening. They have obviously reacted really well to that; hence the survey results.

Finally and most critically, from a customer point of view, is that they see us signing new-name business using those products — so, new PeopleSoft customers that have never been PeopleSoft customers before. The same [goes for] JD Edwards customers. They realise that these are real products with a future that we are going to market with in a serious way.

Some products are PeopleSoft products that fit the legal market really well and [some are] software from JD Edwards that fits the manufacturing market really well, so it is horses for courses. Nevertheless, we are looking at the JD Edwards user base, for example, and asking: "Where are the other customers who are similar, so we can go and sell this to them?"

Some people are not very happy about the way Oracle licenses its software, and some draw comparisons with the on-demand model and its inexpensive licensing. How do you feel about that?
We have to make sure that customers understand what the licensing is and why it is like it is. At the end of the day, you have to have some way of doing the licensing. What works for some people is more difficult for others. What we want to do is make it applicable as far as it goes and accountable as far as is possible.

Siebel coming into the fold really gives us an outstanding competitive product [with which] to go and compete with Salesforce.com

Stuart Turner, Oracle

We have recently come up with some "unlimited deployment" licensing, which some of the bigger customers have bought into. That takes away all the worry of counting anything.

How does that differ from site licensing?
The one thing about site licensing is that it is based on "what it is now". If you are in a fast-growing company, then site licensing has typically been restricted to the size of the company as it is now. The key here is unlimited deployment, so, if you double in size over a period, say three or four years, then it is based on that expectation. You can deploy as much as you like in that time. Then you have put a peg in the ground and said that is what the answer is and, if you deploy it, it's yours, and, if you don't deploy it, then we stop doing this. The good thing about that is it makes it very predictable. Licensing is predictable and it especially makes the support predictable.

So that licensing is over a period of time. At the end of that period, we can review it or whatever?
Yes, and that sort of thing seems to work really, really well for technology. From an applications point of view, then necessarily you have to be a little more variable. So, for instance, for transportation management, that tends to be done under a metric based on the freight and the management — something very specific and a metric that the industry uses all the time.

How about the on-demand model?
Well there are two parts to that model. The first part is running the systems at the customer's premises. We do some of that. We provide our products as a service on top of the standard products. We provide it running at our partner's [premises] and off-site. Finally there is software as a service [SaaS], and we already do that with our CRM product, which is a multi-tenanted offering. That is going really, really well. You will see some of our partners in a year or so offering SaaS as part of our applications — some of the bog standard applications.

The older applications?
Well, in terms of the Oracle E-Business Suite. "Additional" is a better word.

So that means you get all the upgrades and so on?
Yes.

It is a few years now since Salesforce.com popped up in the area, but how do you see the CRM field panning out?
CRM for us would be on-premises, where we have been pretty successful in the UK. The advent of Siebel just changed the game entirely. We are easily the leading product on-premises. When it comes to the on-demand model, then Siebel coming into the fold really gives us an outstanding competitive product [with which] to go and compete with Salesforce.com.