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 Salesforce.com 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 Salesforce.com 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 http://blogs.oracle.com/zen also.)

Launching The SaaS Plugin Report: Are you plugged into the grid yet?

I have started a new blog hosted on Oracle Blog network, it is called The SaaS Plugin Report and will focus exclusively on Software-as-a-Service. I recently switched roles at Oracle from Identity Management to work on a new initiative focused on Software as a Service primarily working with on-demand ISVs and hosting companies.

Here is the first blog post..

Are you plugged into the grid yet?

SaaS is the modern day grid. Decades ago businesses, small and large, started discarding their electric generators and plugged into the electric grid. Businesses that were rich enough or had higher requirements (SLAs) relied on captive on-premise or near-premise generation. This pattern repeats for other infrastructure that today is part of various grids- the railway network, the roads, etc. In similar vein, the computing is going through a generational shift from on-premise services to services grid or SaaS.

In this blog, we will discuss why is SaaS important? How is it changing our daily lives and impacting the decisions of CIOs? What can you as a developer for an ISV, a consultant for an SI or an end-user take advantage of this shift?

As with all generational shifts, this is not going to happen overnight. Every now and then you will notice glimpses of how the world around you is changing- your E-mail moves to Gmail from your local POP server, your CRM moves to a hosted model, your day to day work starts involving logging into sites- and one day a majority of your computing needs are served by SaaS.

Oracle is intimately involved in this transition from several vantage points. Oracle Siebel CRM On-Demand is one of the leaders in CRM SaaS, Oracle On-Demand provides hosting services for technology and applications, and leading ISVs run their SaaS applications on Oracle Database and Middleware.

I hope to have an active engagement with our readers on these topics. Feel free to leave your comments and email me.

Do you think the move to SaaS is real? Are you asking your ISVs about SaaS option? What do you think?

Click here to leave comments.

Please note that all opinions expressed on this and The SaaS Plugin Report are mine and do not in any way reflect opinions of my employer.

The comeback story of Sun

Many in the tech world including myself had written Sun off as a real player. They were a dieing company selling ever decreasing number of expensive boxes to people that still had to because they were locked in. Java, a distribution success, never contributed financially to Sun's bottom line in any meaningful way.

Over the last 2 years, things seem to have changed slowly and now we may be getting close to the Tipping Point- as Jonathan Schwartz points out on his blog. The increasing stock price, still low from 5 years ago has shown some strength lately. But it is the re-appearance of Sun into the dialog on future of computing especially for the customers with large infrastructure that has me most optimistic. In addition, the company has embraced open source, perhaps out of necessity, but has finally open sourced key components such as Solaris and Java. The hardware business is still the meat and potatoes of Sun, and it is not yet clear if their software strategy will work.

On the plus side, Jonathan Schwarz's blog is probably the best CEO blog in town toay. He is not just marketing the latest widget (Blackbox!) but actually talks about substantiative issues facing the company and its customers.

I think we may be seeing another Apple like comeback story here. The focus on identifying big trends (hosted computing, power issues) and focusing the vast resources of a tech giant will result in some very interesting products over the next many quarters and years. And the fact that Sun already has revenue exceeding $13 billion would make it a very compelling turnaround when it tips over. The fact that KKR has invested $700 million is perhaps an indication that the good times are close. The large cash balance and the additional cash raised certainly makes one think that Jonathan may be looking to make some big acquistion moves. This is surely an interesting time to follow Sun- a company I had given up as dead many years ago.

Welcome back, Sun.

What do you think about Sun's comeback? Is it real? Do you think they will buy other companies?

Dear Workday, Citibank called!

Dear Workday, Citibank called. They want their logo back.





Dave Duffield's team launches Workday on Monday. Dave walked away with billions of dollars when Oracle acquired PeopleSoft. Since then, he and his team have been busy creating the 'next generation' of applications starting with HR (or HCM) using the On-demand model (Software-as-a-Service). Much will be written in coming days about Workday, so I will not review details of Workday and in stead point out the obvious about SaaS!

1. SaaS is here to stay: If you have been living under a rock, here is the news. SaaS will account for 25% of all new software revenue by 2011, according to Gartner.
2. Just do it: If you are looking to build a new software company, you don't have to solve a new business problem. Just re-implement any software (CRM, HR, Financials) using SOA to deliver it on-demand.
   
3. Build on SaaS: A lot of opportunities exist to build services that help customers use these SaaS applications- how do I integrate Salesforce with Workday? how do I get Oracle|Siebel On-demand contact data work with my Skype or Jajah applications? how do I consolidate and report across multiple applications without writing SQL queries because I can't? how do I provision and de-provision users?
   

Irrespective of individual successes or failures of Salesforce, Siebel On-Demand, Workday - 5 years from now, the game would have changed. This is no smaller a shift then that from Mainframes to Client-Server.