Building Sales

By Matthew Hicks  |  Posted 2003-09-04 Print this article Print
 License revenues were somewhat flat with most increases seeming to be not in new sales but in upgrades or maintenance. How is Oracle really trying to increase the new sales in the near term? What is the strategy for doing that and is that where these latest (product) releases play a big role? Phillips: All of (the) strategy weve just been talking about, thats our strategy for generating growth; that includes license revenue but not only license revenue. Certainly our support revenue is something thats very important to us and indicates that customers are happy with the product they are receiving. The more were going to the outsourcing business (and) the more we sell software as a service, youll see more recurring types of revenue show up. I think its important to look at that support line and recurring revenue and product updates as the real indicator of the business. But what about the new-license area? How does Oracle push to get new customers?
Phillips: Thats kind of what were doing every day. … Weve been doing that for 25 years and have 250,000 of them. So you come out with good products and services and the market responds to it. Its not a new thing that happened this month or the last three months. But clearly its a hard time. In the database business, for instance, other vendors in recent years have taken more share than you have. So how do you try to reclaim some of that and convince customers of other products to move back over or to adopt Oracle for the first time? Phillips: Your presumption is based on Gartner numbers that claim were losing share, where theres no objective evidence that thats happening. If you look at [surveys of] real customers, or if you look at IDC numbers or a number of other sources, (they) contradict [Gartners results]. I guess the onus is on you to prove. Its one thing to use numbers from Gartner that represent the allocated numbers…all we get is a growth number. We dont have the real numbers, its not reported to the SEC, its not on their financial statements, and its not on their Web sites. And until we see those things to compare our numbers, which are filed publicly, theres really no discussion we can have on those numbers. Theres nothing to compare. … In the fourth quarter your new software-license revenue grew 1 percent. Thats not a huge gain, and I assume there must be a focus on trying to improve that. Whats the strategy moving forward? Is it one where you try to convince non-customers that, "Look, were ahead in this grid approach. You need to join with us"? Or is it some other strategy? Phillips: Well, obviously, yeah, were going to be focusing on grid. …We think we have something very unique for a problem people have today. Usually thats a pretty good formula for people to focus on what you offer. So thats the plan for now. One of your new business areas has been the Collaboration Suite about a year ago, and recently there was an announcement that a few hundred customers already have signed up. There (also) was a new release of that. How much do you expect to focus on the Collaboration Suite? To what extent do you think it can really take on the huge installed base of something like Outlook? Phillips: Its a big focus for us because management of e-mail is another pain point. People in some cases have of hundreds or even thousands of e-mail servers, all of which are potential areas for a virus attack (and) any one of which, if it goes down, theres a problem. So just like theres a consolidation of data centers and a consolidation of big servers, we think theres a consolidation of e-mail servers starting, and we have a product that does that as well and can scale on a single machine. All the e-mail is stored on a single database so you get the benefits of backup and recovery and all that stuff. Given the fact that a lot of Exchange customers are forced to think about an upgrade to the latest version of Exchange and about this consolidation issue ... Theres kind of an opening there. We use it here internally, and it works well. Well see how the market develops, but it certainly looks like an opportunity. Discuss this in the eWeek forum.

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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