Oracle Australia's Phil Kiely has vacated the position of managing director, Australasia, to head up a new division dedicated to the online delivery of Oracle software as a service in the Asia-Pacific region.
Replacing Kiely as Australian MD is Brian Mitchell, formerly Kiely's sales director, while Lee Warren will chair the new managing director position in New Zealand.
Kiely told ARN he had suggested the move, which sees him take responsibility for all of Oracle's online services in the region, to the vendor's US headquarters, and received an enthusiastic response. Kiely admits that such responsibility is a risky option considering some of the barriers in place for selling software as a service, and is hoping for a transformation of Oracle channel partners to make the strategy work. While Larry Ellison claims 80 per cent of Oracle's worldwide revenues will come from selling software as a service within three to five years, its success rests largely on the enthusiasm of channel partners.
"We have partners already wanting to start delivering Oracle technology as a service who are looking to integrate their own technologies around ours," said Kiely. "I've had lots of one-off discussions with Australian partners and we have invited some of them to a conference in Hong Kong to get as much input from them as we can."
Kiely said his preference for channel partners would be those that understand the mid-market - those firms with around 50 to 200 employees. "The partners will obviously be important as we don't have a direct sales force that can satisfy the mid-market."
The main barrier Kiely sees in the way of Oracle On-line's success in Australia is bandwidth. He believes Australian customers are charged too much and are moving into broadband at a slower rate than the rest of the world. He said if Australia holds back on bandwidth, his division will look elsewhere in Asia for the majority of their business opportunities.
"The cost of bandwidth will have to come down in Australia," he said. "It has been declining, but not fast enough. It's still one-and-a-half times higher than in most OECD nations. If Australia does not start to offer better price points on bandwidth, the rest of the world will move on. We will be an island in a global economy."
If this issue is resolved, Kiely expects his decision will be vindicated and the channel will have the opportunity to gain significant margins as a result. "Resellers will enjoy greater margins, but it is purely a matter of how fast they can scale up to this model," he said. "The more volume they can push, the better chance of big margins."