Over the next several months, Oracle's rivals, most notably SAP, used the massive acquisition as a central marketing tool. They said Oracle would need years to get its operations back in order, and that the entity created through the deal would be a bloated company with too many different products. Industry analysts agreed that in the period of uncertainty created by the megamerger, Oracle's competitors would likely siphon away valuable customers.
Flip forward to late June, and Oracle delivered fourth-quarter earnings that widely surpassed Wall Street estimates, driven by sales of the business applications it was supposed to struggle with. The result stands as a resounding victory in perception for Oracle and for Charles Phillips, the company co-president tasked with keeping the software maker's operations on track.
Phillips recently sat down with CNET News.com to discuss the curving path his company recently traveled and its expanded road map for the future. In addition to detailing Oracle's plans, the executive said rumors of a potential departure are as baseless as the market's dire predictions regarding his current employer.
Q: There was so much noise in the market regarding the extent to which Oracle would struggle to retain customers and win new deals while it was working too integrate PeopleSoft. With the better-than-expected applications performance in the fourth quarter Oracle reported last month, is it fair to say that those perceptions were disproved?
Phillips: Yes. I think the perception that there would be customer defections was more a wish by SAP, and maybe smacks of little bit of desperation (since they) spend more time talking about us than about (their) own strategy. But we have not seen that happen and, in fact, the maximum period of uncertainty probably would have been last December, on the first day we announced the deal.
I think what people are forgetting is, as long as you believe that all applications will have to migrate to some service-oriented architecture, that means all applications will have to change and anything that has been written in the last 10 years is going to have to change. So SAP will have to change their architecture as well.
How do you expect that SAP might approach that challenge?
Phillips: (SAP) says "we are going to get your services-based architecture, give you all this new functionality, all this new architecture, but we are not going to change anything." You can't have it both ways. Either they're going to do the same thing that we are doing or they're going to say, "We are not going to change anything, we are going to stay stuck with the architecture of the last decade"--and they can't say that.
So both things cannot be true and customers are figuring that out as they listen to SAP talk about services, architectures and components. They have thousands of people working on changing the architecture. So the only questions are: Who has been more transparent about it? (which would be us) and who has the resources to get there, and who has built infrastructure like this before? On all those accounts, we come out way ahead. I think this whole discussion around services is a middleware-based discussion.
So it comes down to a debate over who has the best applications middleware strategy?
Phillips: Our applications server in middleware strategy is beyond debate the best in the industry?I think the whole discussion favors our strength: the fact that people are talking about architecture again underneath applications. Once we go through that with customers, we find that they are pretty excited about where we are leading them.
Are you saying that customers are buying with the knowledge that in the relatively near future, they will need to change the architecture under their applications?
Phillips: They're buying with the knowledge that the architecture will evolve in an evolutionary way over time toward something they think is pretty exciting. We have told them the pace at which it will evolve, and what exactly it will evolve into.
SAP is saying at the same time theirs won't evolve, but maybe it will, and that they are going to get into same endpoint as Oracle is describing--but that nothing will change. It's just not credible.
So customers understand that there will be significant changes that they need to make to keep up?
Phillips: We get them to the next generation. That has been part of the strength of Oracle. That's why we have so many customers. We have been through many generations of technology. These will be upgrades, not
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Yes I agree with Mr.Charles Phillips that Oracle
hasn't finished, not only that its market is hiking.
Rupa