Thursday, August 23, 2007

Charles Phillips discusses Oracle SaaS Leadership

Charles Phillips recently emphasized Oracle's SaaS leadership in an interview to Datamonitor:

Always on the look out for growth, Oracle believes the SaaS movement will provide it with two revenue opportunities, one from additional database sales and the other from direct income from services.

As far as databases are concerned, president Charles Phillips believes the very nature of SaaS will drive demand for on-premise databases. "SaaS is very database intensive. Normally people do not want all their data resident on an on-demand product. So if is hosting data for a large company, they are forcing them to create a replicated database behind the firewall, which means that companies are creating more and more databases," he said.

Charles also discusses the fact that Oracle was early in adopting the On-Demand model and has been doing it successfully for over 9 years. In another interview with AccountingWeb, Charles Phillips brings out Oracle's successes in SaaS and in competing with SAP.

Dennis Howlett of AccmanPro called the claims outrageous leading to a debate on Enterprise Irregulars - and Josh Greenbaum who writes a ZDNet blog, in a rare feat, wrote the following response arguing for the facts in favor of Oracle and I quote him (with permission):

Rising to the defense of Charles in a disagreement with Dennis almost sounds crazy, but here goes:

The only really outrageous statement comes in the first graf:
We're not trying to preserve something from the 1970s like SAP is. As a company, we were in infrastructure first, then we moved into applications.

Correction: SAP is not preserving anything from the 70s (except some of its founders, who ARE relatively well-preserved. And Oracle was NOT an infrastructure company first: they started in database, moved to applications (in 89) and then went into infrastructure.

But the rest of it is actually not too outrageous.

Statement: We could not be reporting those numbers without competing among SAP customers. A significant proportion of our new customers are also SAP customers who we can now add value to.
Fact check. They are competing among SAP customers: The overlap has always been huge, (DBMS), and now it's bigger with PSFT, SEBL and Hyperion on board. If he didn't have SAP customers to sell (DBMS and middleware and appliactions) to he'd be out of business.

Statement: I know for a fact that there are far more SAP customers calling me now than there were three or four years ago.
Fact check: see above. He's just bought into more overlap.

Statement: We have entire sales territories that are now just based on SAP accounts, our salespeople can make a living out of just selling to SAP accounts.
Fact check: Yup on that one too. Guess what, SAP has territories that are all ORCL too.

Statement: SAP doesn't want that co-existence so they haven't made it easy for their customers.
Fact check: I was only one of several analysts who discussed this issue with Henning earlier in the year. Field sales hasn't been open to ceding CRM to SEBL and completing the rest of the sale with SAP, so they've been losing accounts that want SEBL and care less about the rest of the system.

Statement: SaaS is very database intensive," acknowledges Phillips. "Normally people don't want all their data resident on an on-demand product. So if is hosting data for a large company, they are forcing them to create a replicated database behind the firewall, which means that companies are creating more and more databases."
Fact check: The first part of this doesn't wash with me, though I would love to hear Phil's comments when he gets back. The idea that SaaS generates net greater DBMS sales seems bogus. But the very last statement is true regardless: companies are creating more and more databases.

Statement: Oralce is going to be the on-demand leader, seemingly using the terms on-demand and SaaS interchangeably.
Fact check: until very recently, ORCL and SFDC were the only two companies that stuck with the on-demand market, and, while the numbers were small, ORCL was a leader in number of customers doing OD. If you define leadership by number of users, no way. If you define leadership by vision, ORCL was definitely a leader in OD. As for mixing OD and SaaS, at the risk of annoying the purists, they are interchangeable, except by lexicographers and semanticists intent on splitting hairs.

Statement: We continue to make progress (on fusion).
Fact check: True. Can't say more, or the NDA police will draw and quarter me.

Oracle is not only a leading SaaS provider but is also the database and middleware platform of choice for well known leading SaaS ISVs and several others that are not so well known.

(Note: Cross posted on also.)

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