Oracle: A New Value Proposition
SVP of Application Development Jesper Andersen explained how innovation is driving Oracle's value proposition - and its acquisition strategy - in his Software 2008 keynote.
By Maryann Jones Thompson, SandHill.com
Jun. 03, 2008
Jesper Andersen hasn't watched Oracle's aggressive acquisition strategy from the sidelines- he's lived it. After an early career in Oracle's development organization, Andersen became group VP of PeopleSoft's product strategy organization and was "acquired" to become an Oracle executive again.
With more than 15 years of developing enterprise software, Andersen is well-versed in the way things were - and the way things are headed in the industry. During his keynote address at Software 2008, Andersen addressed the method behind Oracle's acquisition madness, the unique value of his application suite and how Enterprise 2.0 will take a larger role in the company's products in the future.
Acquiring for Critical Mass
When asked about his company's acquisition strategy, Andersen described the goal of creating a critical mass in enterprise applications.
"Obviously we are the leader in the database business. Middleware is also a very large and growing part of our business. It is very important for us in the applications area as well, because today, there is a clear blending of applications and middleware - things like business intelligence, analytics, master data management. These are all areas that I could argue are applications but we could also call them middleware.
Applications is the space I'm in and obviously it is a huge part of our business. It was a big part of Oracle's business before we started our acquisition strategy and now it is bigger. We've got about 35,000 customers across our applications today.
A key question I always get from customers is 'Why did Oracle acquire this company or that company and how does that really fit together?' Well, in a simple way, we can think of it this way: we acquired a number of companies in what I would call horizontal applications - ERP, financials, procurement, HR, manufacturing, CRM - those create critical mass from an applications perspective. With SAP being the leader in the application space overall … Oracle needed to acquire a critical mass of applications to be able to take on SAP. These deals gave us that critical mass."
A Beyond-ERP Suite
Oracle aims to leverage its strategic acquisitions and new technologies to deliver what has historically been thought of as impossible: a best-of-breed integrated suite of
"Stage 2 of the strategy is what's unique about Oracle. That's really the moving beyond ERP. Most customers that I talk to don't see a lot of 'newness' in ERP. … They really want to save their IT dollars, and remain stable in the IP space and move out towards the edges. They want to spend more of their hard-earned IT dollars in some innovative areas. They want to move to off-the-shelf software from a reliable vendor where they can. They're tired of spending hundreds of millions of dollars on maintaining and managing a core engine system… They want to move to utility computing, modern architectures, commercial off-the-shelf software.
And that's really Oracle's value proposition. We're really the only vendor that can provide these unique, mission-critical applications across a wide range of different industries.
How does a customer think of applying those different applications? We would like our customers to think of it this way: From Oracle, you can get a very comprehensive suite of applications across almost any type of industry. What's key is to create a best-of-breed, integrated suite of applications.
And you heard that right - best-of-breed, integrated suite of applications. Companies used to have to compromise - either get a suite of applications that was integrated but functionally-inferior to best-of-breed applications, or couple everything together in a highly costly integration project. Oracle is now providing a best-of-breed integrated suite of applications."
With more than 15 years of developing enterprise software, Andersen is well-versed in the way things were - and the way things are headed in the industry. During his keynote address at Software 2008, Andersen addressed the method behind Oracle's acquisition madness, the unique value of his application suite and how Enterprise 2.0 will take a larger role in the company's products in the future.
Acquiring for Critical Mass
When asked about his company's acquisition strategy, Andersen described the goal of creating a critical mass in enterprise applications.
"Obviously we are the leader in the database business. Middleware is also a very large and growing part of our business. It is very important for us in the applications area as well, because today, there is a clear blending of applications and middleware - things like business intelligence, analytics, master data management. These are all areas that I could argue are applications but we could also call them middleware.
Applications is the space I'm in and obviously it is a huge part of our business. It was a big part of Oracle's business before we started our acquisition strategy and now it is bigger. We've got about 35,000 customers across our applications today.
A key question I always get from customers is 'Why did Oracle acquire this company or that company and how does that really fit together?' Well, in a simple way, we can think of it this way: we acquired a number of companies in what I would call horizontal applications - ERP, financials, procurement, HR, manufacturing, CRM - those create critical mass from an applications perspective. With SAP being the leader in the application space overall … Oracle needed to acquire a critical mass of applications to be able to take on SAP. These deals gave us that critical mass."
A Beyond-ERP Suite
Oracle aims to leverage its strategic acquisitions and new technologies to deliver what has historically been thought of as impossible: a best-of-breed integrated suite of
"Stage 2 of the strategy is what's unique about Oracle. That's really the moving beyond ERP. Most customers that I talk to don't see a lot of 'newness' in ERP. … They really want to save their IT dollars, and remain stable in the IP space and move out towards the edges. They want to spend more of their hard-earned IT dollars in some innovative areas. They want to move to off-the-shelf software from a reliable vendor where they can. They're tired of spending hundreds of millions of dollars on maintaining and managing a core engine system… They want to move to utility computing, modern architectures, commercial off-the-shelf software.
And that's really Oracle's value proposition. We're really the only vendor that can provide these unique, mission-critical applications across a wide range of different industries.
How does a customer think of applying those different applications? We would like our customers to think of it this way: From Oracle, you can get a very comprehensive suite of applications across almost any type of industry. What's key is to create a best-of-breed, integrated suite of applications.
And you heard that right - best-of-breed, integrated suite of applications. Companies used to have to compromise - either get a suite of applications that was integrated but functionally-inferior to best-of-breed applications, or couple everything together in a highly costly integration project. Oracle is now providing a best-of-breed integrated suite of applications."
