Oracle has announced the availability comprehensive set of online services, but has provided little inspiration for traditional IT channel partners to share the spoils.
The software vendor's online strategy involved three related developments: the development of pre-configured Oracle eBusiness software on Compaq, Sun and HP servers; the development of a set of online services for small businesses, and the creation of a new Online Partner Network'.
The first offering, dubbed "Oracle E-Business Suite Online Any Place", involves the provision of the Oracle E-Business suite pre-configured on Compaq ProLiant DL850 servers, Sun Microsystems E420R servers and HP-UX servers. Oracle is hoping to use these products to begin gaining incremental revenues through services. The vendor plans to either house and manage the solution offsite or let the end-user manage and maintain the hardware while the Oracle manages the software from a remote location.
Phil Kiely, vice president for Oracle Online Asia Pacific, told ARN the software vendor is not attempting to dip its hands into the services revenue normally earned by its channel partners. He still considers Oracle a "product-focused company," and said it was merely a case of the vendor finding incremental sources of revenue through hosting services fees.
But Kiely also said the company chose to pre-configure the packages to encourage end users not to have their software customised, a plan that is likely to upset those Oracle partners that provide such services.
"We are waging a war on complexity," he said. "If solutions are highly customised, it can often cause the end user a lot of confusion. But if you buy an Oracle application installed on a pre-configured appliance by Compaq, Sun or HP, you can be sure it is robust and Oracle can manage the application and the licensing and apply patches on your behalf."
Lloyd Borrett, national marketing manager for professional services organisation and Oracle partner Oakton Computing, said customers will always prefer a services organisation that can provide installation, configuration, customisation and support services around enterprise software products. "How many people put in accounting systems and run them as is?" he asked. "Most businesses of this size want a fair bit of consulting and customisation."
But Kiely is adamant that it is quite marginal how much competitive advantage is gained by customising Oracle software. "The customer is not able to take advantage of patches or our streamlined migration path, because the software has been altered," he said. "There is more competitive advantage in simplifying the environment. It is faster, cheaper and more reliable."
Kiely even went as far as saying that users should change their business practices instead of changing software that is "built on best practices".
The vendor also announced its entrance into the small business market with an online bundle of Oracle software with the small business software of another US vendor, NetLedger. Together, the vendors can provide a complete set of financial, CRM, purchasing and e-commerce applications delivered as an online service for a monthly charge. But the catch for international markets is that NetLedger's software was built for the US and Canadian taxation/business environments, meaning international releases will not be available for some time.
Kiely said the vendor will release an Australian version at some unspecified time in the future, and would be more likely to work with NetLedger in the US to develop a deployment offering for this region rather than partnering with an Australian accounting software vendor.
Finally, the vendor announced its "Online Partner Network", an expansion of the Oracle channel beyond its ISV, value-added resellers and distributors and systems integrators. Kiely said an online partner could be a bank or a telco or a content provider, any organisation that can wrap online services around Oracle software. He was unable to name any current Australian examples of such a partner.