Saas Oracle Survives the Challenge, for Now
Times change Old is replaced by the newthe street smart sales guy wins the customerthe high profile premier instituted manager loses a global dealWell, tune with the time, tread of path of least coercion, address customers interests and being aware of changing business trends is sure to keep businesses afloat.
There has now emerged a situation in ERP space, as experts started prophesying that the ERP giant Oracle will have to pack its bags to give way for software entrepreneurs increasingly pushing On-demand or Software-as-a-Service (SaaS). Oracle at the recently concluded Oracle Open World has announced its well-thought strategy to counter all such threats to its existence, has adopted the path of least coercion and confrontation. Oracle resoundingly established precedence of its ERP application by extending its technology prowess to SaaS vendors. It is not quick decision making, but smart business thinking that ensures successful businesses these days. Oracle seems to have proved that.
Oracle has now teamed with Amazon and Intel to boost its cloud computing offerings through what is described now as Cooptition strategy where a business firm coordinates with rival firms for mutual gains in the market. Oracle for itself, finds another avenue (Amazons Elastic Compute Service) for license deals for some of its ERP applications; Amazon stands to gain by running Oracles portfolio, and there by gaining immeasurable credibility for its Cloud services. Intel also walks away as an equal gainer, by extending its technology to Oracle and its partners to run programs and store data for access by large number of users via the Internet.
Oracle has emerged from an infrastructure company focusing on databases and middleware to an applications company as of now with focus on ERP, CRM, SFA etc., Oracle could suitably counter its rivals either way acquisitions or by cooptition. Now, Oracle faces a new threat and challenge from the fast emerging on-demand or software-as-a-service (SaaS). The process of countering the SaaS challenge adequately has begun, and Oracle is pretty sure it would sustain its hold over the ERP space.
There are many equations that are sure to influence Oracles global business thought and catalyze Oracle to redraw its progress and development in the ERP domain.
It is time consuming effort for Oracle to evolve as SaaS/Cloud player. Too expensive for Oracle to build a new SaaS based application along with the already existing and in-development ERP applications
At stage one, what was hinted at Oracle Open World 08, it would open- up its ERP product line for utilization by SaaS vendors. The Oracle-Amazon Cloud initiative is a beginning in this direction. For the time being Oracles endorsing of Cloud platforms whisperingly echo its Customers interests who may already be availing SaaS Vendor services. This brings cheers to Oracles vendors and customers. With customers having greater liberty to use Cloud computing platforms, and vendors freed of a significant barrier of support and licensing for using Oracle applications on the cloud, which now stand to be removed.
Oracle has its graded and phased strategy well in place it has countered many a challenge successfully in the past, and will do so even at the face of SaaS. Next stage of Oracles strategy in countering SaaS challenge will be to safeguard the interests of its shareholders, by buying-off progressing and well-off SaaS vendors. So, all well, ends well. It will be a win-win game for Oracle, vendors and customers.
But certain serious issues remain to be addressed. Oracles business strategists have to decide on how much to spend on what? Should current applications (non-SaaS based) be given precedence over new applications (SaaS based)? Oracles leadership was suggestive, saying that certain investments in the next five years may not yield substantial revenues. Oracle seems to be left with no choice by resorting to its acquisitions strategy, to early negate a sizable impact on its revenues.
Possibly pertinent is the pressure mounting on Oracle, which will keep it on its toes, and forcing it to think of every possible way to survive and keep itself ahead of its competitors. More fundamental issues that have been chronic to its ERP applications, the high costs of implementation and the long time durations to take off, unless addressed effectively by Oracle and its partners, the SaaS challenge is sure to emerge as a threat and question the very existence of the Enterprise giant.
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