By Matthew Hicks  |  Posted 2003-09-04 Email Print this article Print

: One Size Fits All?"> One of Oracles big messages has been that customers can really get their entire infrastructure and their applications from one vendor, namely Oracle, and youve kind of shied away from the best-of-breed approach that some other large vendors have talked about. Is Oracle really continuing on that push with customers? Phillips: We have a broad product line and a very comprehensive solution for a reason. That is what underlies our strategy of design for simplicity—remove some of the layers of technology (and) all the integration complexity thats bogging down CIOs … And one way to do that is to simplify your architecture with products that were designed to work together, that are cohesive and dont need all the glue guns to stitch them back together again.
That interaction between our products adds value to the customer so they dont have to do the integration. We do it for them here at Oracle and then ship it out already integrated. Were not saying our products arent extensible; they are. Thats why we support XML, thats why we have an integration server built into our applications server, thats why our products are written in standard languages like Java. You can do lots of things and extend them. But its in our interest and the customers interest for us to be as comprehensive as possible, and were going to continue to do that. If you want to extend them, great; go ahead and do that. But the market is voting that they like broad, integrated suites of products. If you look at the companies that are doing well—SAP, Oracle, Microsoft—they tend to have broad product lines. How important does the online-services component remain for Oracle? Phillips: Thats huge for us. Its still a big push and one of our most successful businesses right now. It grew faster than just about any other product line last quarter. We are happy with that business. During the fourth quarter, it was up 69 percent year over year. The outsourcing business is a major push. It also represents several strategies. Theres software as a service but it also gets lots of technology in front of customers at a low entry price. They can enjoy pretty much all of our product line in an outsourcing mode. It lowers the startup costs, and we can get you there quickly.
Our philosophy is, "Who better to manage Oracle than Oracle?" Were going to know it better than anybody else. We think its a big differentiator for us. Our competitors really cant offer integrated outsourcing, where you own the entire stack. Its cost-effective for customers because the problem with the outsourcing business is that every vendor whos involved in every layer of the stack wants to get margin on their product, so you have four or five companies and … the outsourcer needs his money and before you know it, it just doesnt make sense. If thats all integrated from one vendor, we only need margin on the entire solution. And were going to do all the bug fixes and bug patches and upgrades. Were going to see that stuff first and get you the most immediate patches and upgrades as you need them and know how to modify those systems better than anybody else. Our outsourcing customers are some of our happiest. They like that we take responsibility for virtually everything. Well do just the tech stack; well do the tech stack and the applications. Most customers are increasingly going toward the whole stack. Will 10G play a role in online services? Will it allow you to do something there you havent done before in allocation of resources and so forth? Phillips: That was actually one of our major test beds for grid technology. Were already using it in our outsourcing business ... Thats basically what outsourcing is about, being able to get economies of scale and to grow incrementally and not have to add huge servers each time theres a spike in demand. We already do that in our outsourcing business. When did the grid-computing aspect enter the picture? Phillips: [The outsourcing group] has been involved all along as this was evolving over the last couple years. Now [it is] one of the showcase customers for grid. So actual, real versions of 10G are running with them? Phillips: …Theyve been testing it. Theyre not live with customers, but theyve been running some areas of their internal operations on it. Its contingent on the customer being ready to upgrade, but weve done enough testing with them to know it works. Discuss this in the eWeek forum. Next page: How important is the PeopleSoft bid?

Matthew Hicks As an online reporter for, Matt Hicks covers the fast-changing developments in Internet technologies. His coverage includes the growing field of Web conferencing software and services. With eight years as a business and technology journalist, Matt has gained insight into the market strategies of IT vendors as well as the needs of enterprise IT managers. He joined Ziff Davis in 1999 as a staff writer for the former Strategies section of eWEEK, where he wrote in-depth features about corporate strategies for e-business and enterprise software. In 2002, he moved to the News department at the magazine as a senior writer specializing in coverage of database software and enterprise networking. Later that year Matt started a yearlong fellowship in Washington, DC, after being awarded an American Political Science Association Congressional Fellowship for Journalist. As a fellow, he spent nine months working on policy issues, including technology policy, in for a Member of the U.S. House of Representatives. He rejoined Ziff Davis in August 2003 as a reporter dedicated to online coverage for Along with Web conferencing, he follows search engines, Web browsers, speech technology and the Internet domain-naming system.

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