Oracle is positioning itself to try and attract more small to midsize businesses (SMB) as well as customers that have specific industry requirements and those with particular governance or compliance needs.
The highly fragmented SMB market presents opportunities for large and small applications vendors to increase revenue if they can attract customers to adopt their ERP (enterprise resource planning) and CRM (customer relationship management) software. Both Oracle and its main rival SAP regularly come out with new initiatives designed to win more SMB hearts and minds.
Oracle already believes it has done a lot of work to make it easier for SMBs to install its applications, according to President Charles Phillips. "Our next investment will be around distribution," he said Wednesday at Oracle's launch of new versions of its E-Business Suite, JD Edwards, PeopleSoft and Siebel applications.
Within the next few weeks, Oracle executives will begin a "world tour for SMBs" stopping in 20 cities and looking to sign up additional partners, Phillips added.
Industry-specific applications is "a wide-open area," Phillips said, where many customers have previously used customized software they built themselves.
On the industries side, Oracle has established four key business units to meet the needs of retail, communications, financial services and utilities customers.
"It's a new concept for Oracle," Phillips said. Each unit has its own general manager and is responsible for its own profits and losses.
Establishing the business units was vital to retaining the key management executives Oracle gained through the acquisitions of companies with industry-specific expertise, he added. These include retail software vendor Retek, communications software firm Portal, and most recently in November utilities applications provider SPL WorldGroup, as well as the 82 percent stake Oracle holds in Indian financial software vendor i-flex Solutions.
"It was something of a lessons learned story," John Wookey, senior vice president of applications at Oracle, said in an interview. He referred back to the company's experience in 1997 when it acquired Treasury Services, a profitability and risk analysis software provider.
When Oracle completed that deal, it moved the Treasury developer team over to Oracle's development operation and mapped all the other Treasury staff including sales and marketing over to the equivalent organizations within Oracle. Over time, while Oracle was able to retain most of the Treasury developers, very few of the skilled sales organization who were educated on the Treasury software remained with the company.
"When we did the Retek acquisition, we didn't want to lose that expertise, so we created the retail unit and most recently the utilities unit for SPL World," Wookey said.
Oracle may look to set up additional industry business units, he added. The vendor already has a public sector group that is separately organized from the general applications sales operations.
Another business unit Oracle has recently put in place is a governance, risk and compliance organization, Wookey said, which was formed after the vendor acquired enterprise content management vendor Stellent in December.
Along with content management, Stellent also provides compliance and records management software and expertise to help customers manage enterprise risk across their entire organizations. The GRC unit will be home to that part of Stellent as well as internal controls software that's featured in E-Business Suite and in PeopleSoft, respectively, Wookey said.
In May, Oracle's arch-rival SAP announced its plans to establish a GRC business unit after acquiring compliance software vendor Virsa Systems.