“What appears revolutionary to others is just the next logical step for us”

From an
RDMS company to an enterprise hardware and software products'
company, would you describe the journey as evolutionary or
revolutionary?

If you look
at the way href="http://www.dqweek.com/Oracle-signs-Avnet-as-its-distributor-for-India">Oracle
has diversified, we started with database, then we
moved into software and then into middleware. As we built all those,
each one has grown through organic development. We also made
acquisitions to compliment our product offerings.

As a
database
vendor, years and years ago, competing with Sybase and Informix, we
were the only database vendor doing applications.

Similarly,
when we ventured from being a software vendor to the next generation
of software-differentiated by the combination of software optimized
for the certain kind of hardware, it was seen as revolutionary from
outside because we are the only company doing it. We enter into both
the new categories of software, where we feel that it is important
for us to offer the whole suite of products to the customers. When we
make a move, from outside it feels like revolutionary, but for us it
is just the next step.

Eleven
acquisitions from 1994 to 2004 and then over 50 acquisitions since
2005. So is it a question of large and larger gaps in the Oracle
product strategy?

The major
thing between 1990 and 2000 was, that we were largely into 2 product
segments-database and applications. In database, in every count, we
are the market leader. And we have done a couple of
acquisitions-Times Ten and Berkeley, in the database segment.

In 2000, we
diversified into applications and from 2004 onwards we diversified
into systems. Later, we diversified into hardware side and also into
different segments of middleware. As a part of the diversification,
we built a lot of things ourselves and over 80% of them were
organically built.

It is the
perception outside, when they read in the press, that everything is
through acquisitions. But that is not the case. As we continue to
build products organically, what we realize is that when we need to
offer broader footprint in a particular segment, we could fill it
with some acquisitions.

But that
also seems to suggest that some of the acquisitions were not good. If
you have over 60-70 companies acquired, only 20% of your portfolio is
from the acquired companies?

A lot of our
acquisitions have been done to buy smaller products that can
complement our overall solution offering but not necessarily for the
revenues. Only 4 companies which we had bought had significant
revenues-Peoplesoft, Siebel, BEA Systems, and Hyperion.

We make
acquisition only when we feel that integrating them into our product
portfolio is a right thing. We are proud of the fact that we have
built a lot of products organically, and we don't have any issue in
saying we have diversified into new segments, and at the same time we
do acquisitions to fill the product portfolio.

Has
Oracle
got most of it when it comes to enterprise applications? What is
missing and what could be next?

Four-five
years ago, we said we need to use the analytical tools to provide the
information. We found that competing in that space, we needed 4 sets
of products. We needed analytical tools for querying analysis,
analytical application that differentiate our BI technology by
providing packet analysis for the people who use our ERP and CRM
solutions. We also wanted to offer solutions which are analytical in
nature but used by financial people-planning, budgeting, etc. So
when we looked at that segment, we said we are going to build
technology layer and we are also going to build analytical
application for ERP and CRM applications. Today it is very good
business for us.

IBM is
taking
ads that over 1,000 Oracle/Sun customers have moved to IBM Power
Systems since 2009. Is there any customer research/data that
indicates that the Oracle's Sun works better for them than when it
was Sun's Sun? If you look at our overall business, you can check
how our hardware and software business is doing. Because we are in a
quiet period I can't talk on specific numbers, but one thing I can
say is that we are very well placed against IBM.

More than
a year after Sun's acquisition, why is Oracle losing its hardware
market share?

We never had
plans to compete on unit volumes when we acquired Sun. Today unit
volume is dominated by single processor x86 servers. There is zero
differentiation we offer in that segment. Our belief is that all of
us are going to compete in hardware. Oracle is going to compete in
hardware sector with 2 categories of servers and then a couple of
categories on storage. If you look at the market share in terms of
profit and revenue, we have grown substantially since Sun's
acquisition but if you look at the marketshare in the unit volume,
obviously that is not our focus area.

What
would
you describe as Oracle's biggest contribution to the IT industry,
and to the consumers?

We have got a
very strong line of products in the database, middleware, and
application space. Most of the enterprises around the world run their
business on Oracle. BPM and identity management is 100% organically
built by Oracle. Our biggest contribution is for enterprise around
the world in database space where we have roughly 400,000 customers.

In
middleware
we have around 160,000 while there are 120,000 customers in
applications. All these companies are doing their daily business on
our products.

But isn't
that the story from past 10 years?

It's been
the story for the last 10 years. Our view is that there are 3-4
changes coming up in IT. First thing is that there is a lot of hype
about cloud computing but it is certainly becoming a reality among
more enterprise customers.

Many
companies are building private clouds. They all consolidate their
system into centrally-managed data center environment. And they
provide database, middleware, and business application as a service
to all of their lines of business. That's one and the big factor
that is stemming cost, improving agility and how fast you can deliver
these things.

Secondly,
our
view is that the data center of the future is built on fewer
standardized building blocks that runs much faster and are a lot more
easier to manage.

The third
thing, I think, is that many of the business users in the company now
want to control their systems, ie, they can use the configured
software and no need to bring in the IT person to help you.