Oracle stresses outsourcing, TCO

SAN DIEGO – Outsourcing for the mid-sized market and cost of ownership were two key areas of focus at the recent Oracle AppsWorld conference.

Jeff Henley, executive vice-president and CFO for Oracle Corp., said in his conference-opening keynote that these areas, along with consolidation and Oracle’s ongoing relationship with Linux are going to be important for the company and the industry in the days ahead.

Mark Jarvis, chief marketing officer for Oracle, told delegates that one of Oracle’s new offerings, Business Flow Accelerators, gives customers bundled product and service packages designed to help them improve business processes and boost ROI.

Business Flow Accelerators are based on Oracle application business flows, a collection of integrated application components that enable end-to-end business processes without the need for custom integration.

With them, clients could take an incremental approach to implementing Oracle’s e-business suite, Jarvis added – for instance, allowing customers to take horizontal applications, such as accounting and payroll, and outsource them, freeing up resources for critical software or product development and integration. Then customers could consider adding more functions to the outsourcing portion of the agreement, according to Oracle.

Henley also noted that Oracle has seen significant growth in the mid-market, especially in outsourcing, a capability Oracle has been focused on for four years.

Warren Shiau, an analyst with Toronto-based IDC Canada Ltd., said it may be difficult for Oracle to crack the Canadian mid-market.

He said it’s a question of “whether or not (Oracle’s outsourcing costs) come in a at a price point that the Canadian market will find attractive.”

Shiau added that there are a number of Canadian businesses still running as “mom and pop shops,” and they may not have the business process maturity to make good use of Oracle’s outsourcing opportunities.

Oracle officials also outlined its plans for Linux, noting that its low cost and robust performance appeals to users.

Last year, Oracle CEO Larry Ellison said Linux did not seem to be at a mature stage, but today Oracle completely supports Linux, and Jarvis said Linux is “very much ready for use.”

The Oracle on Linux initiatives and Business Flow Accelerators will help companies find lower total cost of ownership, he added.

Henley predicted slow but continued growth for the tech industry. Oracle’s last few quarters had all experienced negative revenue growth, he said. “(But) for the next quarter we are predicting positive revenue growth.”

Oracle customers are ready to go forward with a variety of projects, he added, but they are waiting for some positive signs from the economy before they proceed.