Excerpts from the interview:

InformationWeek: As a result of Oracle's acquisition strategy, you've helped turn the company into a Wall Street darling and greatly improved its market cap. But is it good for customers?

Phillips: Customers now recognize that Oracle acquiring a product is a very good thing for them. The product will be quickly enhanced and tested more thoroughly, supported globally, and integrated into the Oracle stack. Our strategy is consistent with the decisions customers are already making: They want fewer software suppliers and more accountability, more Standardization and pre-integration, and less complexity. We are removing the complexity from their environments by taking responsibility for integration, certification, and testing across all these products. We can do it once instead of each customer doing this on their own.

Our renewals on support agreements reached an all-time high last quarter. We have to earn the renewals each month, and customers generally don't spend money with vendors that aren't providing value. Our customer satisfaction ratings are also at an all-time high. We've shipped more updates to the products we've acquired than anyone anticipated. Call any of our user groups and they'll register their satisfaction on the product improvements. We've improved the quality, broadened the language support, integrated the products where appropriate, expanded support to more countries with more localizations, and updated the underlying tech stack with modern middleware. We've done what we said we would do, and customers are rewarding us for providing value.

InformationWeek: SAP is planning something called A1S, an on-demand service for small and midsize companies. What's Oracle's position on software as a service (SaaS) and its response to A1S?

Phillips: They're nine years behind us on SaaS, and they don't know what they don't know. We have everything they're trying to build in SaaS. This will divert their resources and focus from their core product, mySap, while they walk up the learning curve. They now have at least four code bases: A1S, All in One, BusinessOne, and mySAP. And they still have to maintain R/3. By our count, they're using seven different development tools and five data models within mySap alone. In fact, given that many of the product groups in mySAP have separate schemas, separate installation processes, and significant integration gaps, I'd argue they have different product lines even under the mySAP umbrella, which can happen if you build a monster with 270 million lines of code. It has a life of its own and represents the very definition of complexity. That's why SAP had to start over for the small-business market.

So we both have multiple product lines, but we have critical mass on all of ours and a standard integration platform, BPEL orchestration layer, and object model - all in AIA - across all of our products. SAP does not. In fact, there are more SAP customers using Oracle Fusion middleware to integrate SAP applications than those using Netweaver. Netweaver appears to be directionless, as their Palo Alto people head for the exits with all the internal struggles with Waldorf.

InformationWeek: Some analysts state matter-of-factly that there will be no super-set of Fusion applications within the next few years; that Oracle has changed its strategy here and will instead focus on a small set of Fusion applications and integration with the other software apps. Has there been a shift in strategy?

Phillips: We certainly recognize the tremendous value and brand loyalty associated with JD Edwards, PeopleSoft, Siebel, and Oracle EBS, and we plan to aggressively enhance those products for many years to come. We could have communicated that more clearly on day one, but now I think people understand what we're doing and they're responding well.

We've never said that every single feature in every single application would end up in Fusion Applications. We said we'd use our existing applications as a blue print to determine what represents the "best of " features, and we'd concentrate on those in Fusion Applications. But Fusion Applications will simply be an additional choice along with all of our other applications. The object model in AIA is the same one that will be used in Fusion Applications, which is a logical design, so it will make co-existence and upgrades easier for those customers that choose to go that route. But many will stay with PeopleSoft, Oracle EBS, Siebel, and JD Edwards, and that's fine with us. All these products will continue to have dedicated development teams that deliver enhancements based on conversations with our customers.

Source: 1

Tags: sap - a1s - oracle - siebel - fusion - charles+philips

Prashanth Rai