Taking the middle ground

Rumours of Oracle slipping from its position as enterprise business leader are unfounded, claims its EMEA chief Sergio Giacoletto. In fact, it is expanding into fresh sectors such as middleware

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By  Peter Branton Published  March 19, 2006

|~|Sergio-Giacolettobody.jpg|~|Sergio Giacoletto, head of Oracle’s EMEA operations, pointed to the success of the firm’s academy in training people to fill the gap in the IT skills market in the Middle East.|~|There has been talk in the region’s trade press that Oracle’s position as the leading firm for enterprise business applications is under threat here in the Middle East. Unsurprisingly, Sergio Giacoletto disputes such talk: as boss of Oracle’s Europe, Middle East and Africa operations, he is responsible for ensuring the firm retains the growth it has enjoyed to date in the region and positioning it for further success. With responsibility for over 100 offices spread across more than 50 countries in his territory, Giacoletto is unquestionably a busy man: he takes time out of his schedule to talk to IT Weekly. What is the purpose of your visit to Jordan? This is one of my regular trips to Jordan over the past couple of years. As you probably know we started a regional technical centre here in Amman a couple of months ago. We also have quite a number of customers both in the private and public sector and we have opened an Oracle academy together with partners to train people here. I was here to meet a number of customers, review progress and this morning I had an audience with His Majesty King Abdullah II to make him a progress report on what has been done in the past year. What has been the progress on these projects? Very good. Basically we identified a couple of years ago the opportunity to leverage the good skills available in Jordan, and the good people coming from university to build up the regional technical centre. We started nine months ago and we have 50 people on board, and we are busy hiring other people so it is coming along quite nicely. It is important because the IT business is growing very fast in the Middle East and there is a shortage of skills to meet the demand here. Very often, there are people imported from India and other places to do the job. We think it makes sense to develop local skills, so by combination of aggressive education, investment by partners and investment by us, creating the centre and people, we can build capacity that will be used for the region in general. What will be the next stage? We have the first 50 people on board already, we are hiring the next batch of people. We said yesterday that we are going to target 125 unemployed graduates, give them intensive three to six month training at our expense and we’ll hire some of them and others will find jobs with our partners and our customers. So I think the base foundation is there, the office is open, the centre is operating and now it is just a matter of growth. You’re head of all of EMEA of course, which is a large, diverse, region, geographically and business-wise. How often do you get over to the Middle East and how do you find it? Probably four or five times a year I would say, depending on the year. Last year I was in the region six times at least. The whole area of the Middle East is an interesting market, there are plenty of opportunities. Of course, as we all know there are plenty of challenges as well, not just from the political point of view. But the region’s IT market is definitely an interesting market, the customer here is as sophisticated and as advanced as in any other country. Very often we find the adoption of new technology is very very good here, as I said before, the biggest issue we find in the market is finding enough skilled people, particularly in the area of project management, busine- ss applications, implementing enterprise resource planning (ERP) systems. That is the challenge for the region overall, and I think it is very important to have private/public partnerships. It is in the interests of the region as well as us companies to build up a block of skills in these areas. Oracle does of course have a very strong record of success here in the region, despite its competition with companies such as SAP. We have seen signs here of increased competitiveness, with companies putting more resources into the region. How are you going to maintain your success here? We have enjoyed a leadership position in the region in terms of both applications and technology because we have invested in it very early, with the Arabised products, support for local languages and so on. We now employ over 500 people in the region, and we have literally thousands of staff available [through partners]. So I think clearly we will continue to compete by providing the most cost-effective solutions that we do today. I think it is also very important of course for the customers to have references they can see. We have quite a number of successful references in the region, and we have good partners — never enough, we have to have more — but good partners to provide the support. I think we have a good opportunity to continue to grow, so I think it is more of the same. Frankly, I don’t see any need to change: I think we can continue with the same strategy, which has worked so far. We just have to continue to do our work, continue to hire people, we are continuously hiring people. We have to continue investing in training our partners so that there is a big enough eco-system to encourage our customers to buy. ||**|||~|oraclefeature2body.jpg|~|Oracle boss Larry Ellison has drawn attention to the on-demand market. |~|Oracle has also added to that presence by buying some big competitors internationally. One of those buys was Siebel, which did have a few large customers in the region, such as Saudi Telecom Company (STC) I believe. However, apart from those big deals, Siebel didn’t seem to have much presence here, either in terms of staff on the ground, or visibility generally. Will we see more of a presence for Siebel in the region now? Not necessarily, clearly we will continue to support Siebel customers and there are a few specific large industries here where the Siebel offering makes sense. On the other hand, the majority of the customers here want to continue to buy their business suite where you have a full integration of ERP and customer relationship management (CRM), therefore clearly we will continue to actively market the E-Business Suite which remains our integrated product. As you know, the acquisitions of Siebel and PeopleSoft are part of the consolidation of the market. Customers are asking us to integrate those products and provide them with the next-generation of integrated products. The large numbers of customers we have in the Middle East who have the E-Business Suite have already achieved that kind of integration, therefore we will continue to support it and enhance it. Of course, at some point in the future, there will be the next generation application, which will be an update for our E-Business customers. So I would say that here in the region, we will be really focusing on continuing to sell E-Business Suite, with maybe a few possible very large customers, in say telecom, where the Siebel product may be best fit. You are referring there, I take it, to Project Fusion. What sort of progress have we seen so far on Fusion? Just to be clear, the Fusion word refers to two things. We have the Fusion middleware, which is up and running as one of our key businesses, so that is ongoing. The Fusion project is the name for the next-generation of applications, which is going to be 100% based on service-oriented architecture and Java. That project will be, if you want, the upgrade path for our existing E-Business Suite customers and the integration point for our PeopleSoft and Siebel customers. That project is a work in progress, we announced back in January that we are targeting to ship the first Fusion product in 2008 and this is the current projection. We will continue to upgrade and enhance the existing product lines, we will release E-Business Suite version 12 this year and there are more upgrades coming. Then in 2008, we expect the first version of Fusion to come out. Meanwhile we have also announced support for existing PeopleSoft and Siebel customers so they can continue to protect their investments. So far we are on track, but it is still early days. There has been in a lot of speculation in the market about other acquisitions that Oracle might make. Clearly you are going to buy other companies. I read a recent interview with Larry Ellison, where he highlighted the bus- iness intelligence (BI) and middleware markers as being of key importance to Oracle. Why would these areas be so important to the company and can you give us an indication of other possible areas for acquisitions? The middleware market is very important, because I think most companies — not Microsoft of course — agree that the next-generation [of product] has to be based on service-oriented architecture (SOA) and open standards. Middleware is very important as a business on its own, for the customers to develop and integrate their systems and as a platform for our applications. For Oracle, that business has been growing very fast, it is now a US$1billion business for us, and in Europe we passed BEA Systems last year. Therefore there is a good market opportunity for us. Frankly, we are still in the early days. Many customers are still in the early days of adopting a SOA, many customers have bought applications from a variety of different vendors they are looking now for a set of compatible products they can use. So, we look at this as an opportunity, in middleware we have already done a number of small acquisitions, and we will continue to do development here. For example, we announced at the 3GSM conference [in Barcelona in February] a specific telecom version of our middleware, which includes such features as voice over internet protocol (VoIP) and so on. The BI market is also a very interesting market for us. When we bought Siebel, we acquired its BI product as well. However, I cannot comment on specific acquisition targets, those are for Larry Ellison to comment on. OK then, lets talk about a different business and technology area that Oracle has been linked with. The on-demand market is also one that senior executives, such as Larry Ellison again, have highlighted as being important to you. Do you think that this will prove to be important for the EMEA market? Definitely. We have been now on this on-demand for a number of years. Uptake is higher in the Anglo-Saxon market for the time being than in some other markets because of issues of cost of communication and concern over security. However, it is absolutely clear to us that for certain types of business processes — sales force automation is one, payroll is another — it makes sense for the company to buy the service on-demand. So clearly, we have seen a certain part of the software market shifting from the traditional model, where you sell software, you implement it at the customer’s site and the customer runs it, to this model where the customer buys on-demand a particular business process. If you think for a moment, about payroll: for many many years customers have been outsourcing payroll and they pay so many cents per pay [packet]. Now clearly, in the current generation, when customers outsource payroll or human resources they want to continue to have access to this data, to provide intelligence there. What is important is that the on-demand software satisfies a particular business process, and it provides the connectivity to the in-house systemsof the customer. I think that one of the challenges is that if the process is stand-alone or a temporary one, then fine, but when your process is connected to the other systems of the company then you really need a service-oriented architecture approach. So I think that the market is taking a little bit more time to pick up, it takes time for the customer to get confidence on this, and to basically get all the right web-based applications. Definitely it is an area in which we will continue to invest, particularly with the acquisition of Siebel. Siebel has a CRM on-demand product, which we plan to extend and develop to compete against Salesforce.com. ||**||

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