As Published In May 2007

Connecting to the Future

An Interview with President Charles Phillips

Charles Phillips was a familiar face around Oracle long before he became the company's president. At Morgan Stanley, Phillips was one of the first to recognize the critical role that Oracle's technology would play in global business enterprises. Since joining the company and becoming president in 2004, he has taken on responsibility for global field operations and corporate strategy. He spoke with Profit about the explosion of innovation in the product areas and how Oracle will surpass expectations during the next 30 years.

PROFIT: Oracle has experienced great success over the past 30 years—why do you think that is?

PHILLIPS: Oracle is focused on simple goals: innovation and results. We're not afraid to make a change and not wedded to the way we did it last year. We're in a dynamic market, and that suits us well since our competitors can't change as fast.

PROFIT: How would you describe Oracle's culture?

PHILLIPS: It's a meritocracy. People are impressed by results and respect performance. That's healthy for any organization. It attracts high performers and keeps great leaders.

PROFIT: How would you characterize trends in IT spending, and how is Oracle adjusting to that climate?

PHILLIPS: The economy is not getting stronger, that's for sure. But we are taking share. The environment could be healthier but with the wealth of products we have, we should continue to outgrow the industry.

PROFIT: What's the most exciting thing happening with products right now—first on the technology side?

PHILLIPS: I'm excited that so many of our applications are uptaking our Oracle Fusion Middleware products. We are just beginning to show the power of having an applications company inside a technology company. We are advancing manageability, performance, and security like no other company can because of our unique business mix. I also think the security and content management products are compelling. Every customer that I've told about Oracle Database Vault [an option to Oracle Database 10g Release 2 Enterprise Edition] and Oracle Audit Vault [a standalone product] immediately leans forward and wants to know more.

PROFIT: And for the applications products? With Oracle Fusion in the relatively near future and five applications launches happening this spring, you must be getting a sense of how functionality is starting to converge.

PHILLIPS: I think the integration that we are starting to deliver between existing products using Oracle Fusion Middleware will add significant value for customers and make good on our promise of delivering a virtual suite across all of our applications. Customers expect us to take over the task of integration, and we are just now starting to deliver prepackaged business flows built entirely on standards in a canonical model that will simplify the integration process. Customers only have to integrate an application into the platform once. Once they've tapped that dial tone, they are integrated into all other applications that have been previously connected—a one-to-many model.

PROFIT: A recent survey showed that although some customers are still confused about Oracle Fusion, those people who do say that their companies "get" it are also most likely to say that they're comfortable with the basic premise of Oracle Fusion. What's the most common question that you're hearing about Oracle Fusion, and what's your response?

PHILLIPS: I get fewer questions on Oracle Fusion since the announcement of Applications Unlimited. People are comfortable with what they have. When Oracle Fusion is available, they'll review it, but there is less of a burning need to upgrade. To the extent that they are still asking questions, they're usually about the upgrade process and how difficult it may be. But they are much less concerned with the Oracle Fusion migration issue since they have the option of staying on existing platforms.

PROFIT: How does Oracle respond to predictions that the database is becoming a commodity?

PHILLIPS: The database is getting more complex and more powerful. Only people who don't have to manage data say it's a commodity. If that were true, there are plenty of free databases out there and people would quickly move into the free house instead of paying us rent.

PROFIT: Can you talk about Oracle's approach to open source, and how it differs from the competition?

PHILLIPS: We'll leverage open source where it makes sense. We've been long-time supporters of open source products and own quite a few ourselves. We see it as an important resource among many resources we will leverage to solve customer problems. You won't see us going out and disparaging the open source community the way Microsoft does or ignoring it the way SAP does.

PROFIT: Oracle has changed a lot in the past few years, and you've had an opportunity to observe it from the outside and the inside. How do you see Oracle's position within the technology industry, both the way it's perceived and how it compares to other software companies?

PHILLIPS: Oracle always finds a way to stay on the edge and lead the next charge. We are simply doing what we always do. We have an addiction to innovation and that lies at the heart of the company.

PROFIT: In 2003, Oracle started marketing aggressively to small and medium businesses [SMBs]. What was the reason behind this move, and what special product and service offerings were created for SMBs?

PHILLIPS: We have more than 180,000 small business customers, so I can't say it's a new idea. But now that we have products that are better packaged and more-appropriately priced for the SMB market, it makes sense to add more distribution and marketing to take advantage of the opportunity. Small companies like integrated suites with fewer moving parts. That would be us.

PROFIT: What will Oracle's role be in the growing on-demand and software-as-a-service markets?

PHILLIPS: Oracle has been a key supporter of on-demand computing since 1999. Unlike many other software companies, we understand this growing market's importance and believe that it's now at an important inflection point in its development and direction. Oracle's technology and applications products are very well positioned to influence and drive this growing market. Our success with on-demand products like Siebel CRM On Demand and Oracle E-Business Suite On Demand speak to our commitment and leadership in on-demand computing.

PROFIT: What about the company's acquisition strategy? After years of homegrown software and few acquisitions, Oracle has acquired 28 companies in the past three years. How is the integration process going, and what can we expect to see in the future?

PHILLIPS: The results speak for themselves. Against all expectations and odds, the acquisitions have gone quite well. They've made us significantly more important to our customers and feared by our competitors. I need another [US]$50 billion to spend.

PROFIT: You came to Oracle after a successful career on Wall Street, rather than as a technology guy. How has that affected the way you've done your job at Oracle? How do you think you've changed since you started at Oracle?

PHILLIPS: It's hard to say how my background affected my approach relative to others since I only have my perspective. But it felt very familiar given all my years in the military, which is the one place where people get formal leadership training and manage large organizations at an early age.

PROFIT: Speaking of success, you were rejected 125 times before you got your first job on Wall Street. What kept you going? How do you think you finally got the offer you were looking for?

PHILLIPS: Well I only needed one person to say yes. The rest were irrelevant in my mind.