At Oracle OpenWorld 2007, executives emphasize the benefits of having made 41 acquisitions in 45 months: "We've become the IPO market for the enterprise software industry."
Posted Nov 13, 2007
SAN FRANCISCO -- With a bit of a patriotic flourish to connote coinciding with Veterans' Day, Oracle kicked off its 2007 OpenWorld conference here yesterday with a brief salute to current and former servicemen and women, and members of military families, as well. As the final bars of a recorded national anthem died away, Oracle President Charles Phillips, himself a former U.S. Marine, delivered a keynote address that ticked off the updates and innovations in Oracle's offerings this year.
Looking backward as well as forward, Phillips's address also reiterated the theme of nostalgia that runs through this year's event, which, in addition to hosting 43,000 of the vendor's faithful partners and customers, marks the 30th anniversary of the founding of the company that would one day become Oracle. Phillips struck the "innovation" note early and often: "Our history of innovation is something that really speaks to the essence of what this company has become," he told the crowd, before coining a phrase to embody Oracle's company-purchasing frenzy over the last four years: "Acquired Innovation."
Phillips broke down Oracle's operations into what he called its "three major businesses":
- Databases: Phillips reiterated Oracle's stranglehold on the database marketplace, noting not just that Oracle had 47% of the market, but that its share was more than the next two closest competitors combined.
- Middleware: Phillips called Oracle's middleware "the fastest-growing middleware suite in the market" -- up 129%, he said, without explaining what particular metric that referred to -- before pointing out that Oracle is rated a "Leader" in more than a dozen of Gartner's Magic Quadrant assessments of various middleware components. (Notably, Phillips made no mention whatsoever of Oracle's recent -- and as-yet-unsuccessful -- attempt to purchase middleware competitor BEA Systems.)
- Applications: The next stage for Oracle is "to go beyond just ERP and CRM, which [were] traditionally what large enterprise software companies did," Phillips said. "That was a large industry, and it still is. But now we're adding many more capabilities going beyond that, into industries...with applications specific to those industries. That's a new change in our strategy."
Oracle's innovations go beyond the software itself, Phillips said. "We also innovate with our business model," he said. " 'Innovation' is not just products, but it's also how you go to market, how you bring more capabilities to the customer. Given where we are at this point in history in our industry, acquisitions make a lot more sense." Phillips took special note of the 41 acquisitions Oracle has made in the last 45 months: "Companies are a lot more proven [and have] a lot more customers, the products are seasoned -- and they're actually cheaper [in the post-dot-com-bust era]. So we decided to start bringing innovation to market, supplementing our internal development -- which is about $2 billion a year -- with 'acquired research and development,' which is the way we look at it," he said.
"If there's something interesting happening at a company that we think is unique, [we can] bring that innovation to you more quickly, but in the context of an integrated suite of products that we can support," Phillips said. "We view this as extending our research-and-development budget to the rest of the industry. Given who we are, and our size, and this well-known strategy now that includes acquisitions, anyone remotely thinking about selling their company is going to come to us with their enterprise software business. Given the state of the financial markets and the traditional IPO market, we've become the IPO market for the enterprise software industry."
Oracle, though, remains a discerning shopper when it comes to doing deals, Phillips told the crowd: "For every one we do, there's another hundred that we don't do."
Phillips also outlined Oracle's big-ticket items launching or being introduced at OpenWorld:
- Oracle Application Integration Architecture 2.0;
- Fusion Middleware (which Phillips characterized as "being in beta now");
- Oracle LogicalApps Active Governance (for compliance initiatives)'
- Oracle Agile PLM (for software development);
- Enterprise Manager 11g (another "beta"-stage element);
- My Oracle Support; and
- Oracle VM (a tool targeting the much-buzzed-about trend toward virtualization).
OpenWorld 2007 continues at San Francisco's Moscone Center through Thursday, November 15.
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