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Oracle Salutes ''Acquired Innovation''
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
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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.

Related articles: Oracle Offers to Buy BEA Systems On the heels of the SAP-Business Objects deal, Larry Ellison's company makes a multibillion-dollar move of its own. Fusion Is Heating Up Oracle updates progress and road maps for its SOA middleware platform one year after its inception. BEA Systems Makes Hot SOA Moves The acquisition of metadata repository Flashline and an expanded partnership with Tata Consultancy Services puts BEA back on the A list. In Oracle's Star Wars, a Wookey Falls The company's head of Fusion Applications is expected to leave, raising questions and concerns about the vendor's ability to deliver Fusion as scheduled. Oracle's Name Game The latest Siebel CRM On Demand highlights the software giant's interest in the on-demand market and underscores the strength of the Siebel name. What's in a Name? Oracle's Mixed Message With Siebel CRM On Demand Oracle reverts to the Siebel moniker for the newest version of its CRM On Demand product, which features several usability, customization, and integration enhancements. SAP to Acquire Business Objects The friendly takeover folds new business intelligence capabilities into one of the leading enterprise software platforms; amidst differing opinions, rumors loom of a counteroffer from Oracle or IBM. Infor Takes a Breather from Building Its Better Mousetrap Software conglomerate tells analysts to expect no further acquisitions--for now. Oracle Fulfills Demand Again The latest release in the CRM On Demand series, version 10 delivers custom-fit functionality for operations of all sizes. Siebel Reveals OnDemand 9 The release integrates with Lotus Notes and provides hosted contact center enhancements. CRM Numbers Grow, But Also Mislead The customer management applications market rose 8 percent in 2006, as it did in 2005; SAP and Oracle continue to lead, but their revenue figures don't tell the full tale. Oracle's Smaller Slice of CRM's Bigger Pie The worldwide CRM market grew 11.5 percent in 2006 to just under $6.5 billion in revenue; while SAP continues to dominate, Oracle Corp. sees both its revenue and its market share slip. Partner Day at Oracle OpenWorld OpenWorld '06: AMD and Dell, pushing their integrations with Oracle, dominate the keynote sessions; the emphasis is on hardware making software work. Big Red Roars OpenWorld '06: Larry Ellison talks about Oracle's history with grid computing and Linux, and drops a bombshell for server operators everywhere. A Killer Replacement: Oracle Pulls the Plug On IBM Oracle's announcement of its intent to acquire Siebel raised doubts about how long Siebel's OnDemand alliance with IBM would last. Oracle's First Fusion App Oracle plans to release its first fused application in January 2006. Oracle Unveils Its First Fusion App OpenWorld '05: Product service and support for existing customers highlight OpenWorld day 2, but challenges have emerged for Siebel customers' business. Oracle's Fused Future: Support and Interoperability OpenWorld '05: The keynote address at OpenWorld is confident and comprehensive, with targeted talk of growth. A New Seer at Oracle Siebel Reveals OnDemand 9 Oracle Will Buy Siebel
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