Oracle's Approach to Industries

Horizontal software vendors are renowned for thinking they can sell industry-specific solutions on their own, only to fail through lack of vertical expertise and understanding. In this interview Dr Juan F. Rada, executive vice president for Industries, Oracle EMEA, explains why Oracle has chosen to partner with vertical ISVs rather than attempt to go it alone.

In the software business, as in any other sector, there are vendors who believe they can have their cake and eat it. Many companies have created robust, reliable, popular pieces of technology - and then spoiled things for themselves by believing they can "verticalise" that solution to address the specific needs of different industries.

Many such attempts fail; sometimes because the supposed verticalisation does not extend much beneath the interface; sometimes because the developers do not properly understand the needs of each industry, and sometimes because the various "industry versions" require so much re-coding that the product becomes unprofitable.

ISVs Are Crucial to Success

Juan Rada, Oracle's executive vice president for Industries in EMEA, firmly believes that one vendor cannot possibly hope to do it all. "Oracle will never develop a completely vertical product," he says. "For this reason, close working relationships with industry-specific ISVs are crucial to our success."

Oracle's product stack is not entirely without vertical functionality, however. "Oracle has become the de facto database for the bio-informatics industry, and we are supporting industry initiatives like RosettaNet for the high-tech manufacturing sector, in our application server layer," Rada says.

"Our E-Business Suite of applications also includes some vertical modules - for example a Telco Provisioning application and other telecommunications industry functionality. We have included industry functionality within the Suite in areas where we are particularly strong. But in essence, Oracle's technology stack is basically horizontal."

Six Key Target Industries

If Oracle's technology stack is fundamentally horizontal, the way the company goes to market is anything but. "In EMEA we are addressing six industries as priorities," says Rada.

He explains that the Financial Services, Public Sector, Healthcare & Life Sciences, Travel & Transport, Industrial Manufacturing and Comms, Media & Utilities sectors all have go-to-market plans and initiatives designed around them. In countries where Oracle has a significant presence, the sales force is entirely organised around these six industries for named accounts, and sometimes midmarket activities too - particularly in public services.

Financial Services

ISVs are heavily involved in the creation and execution of these go-to-market plans, which are designed to address business issues prevalent this fiscal year. "ISVs are vital to the way we go to market," affirms Rada. "For example, we have a large go-to-market initiative around the Basel II Capital Accord in the Financial Services industry, which we have put together with relevant ISV partners. It is a major initiative involving joint sales and marketing activities and the establishment of a dedicated Basel II Solution Centre in the UK."

Healthcare

In the Healthcare sector, another major initiative is the Oracle Healthcare Transaction Base, an integration platform that allows specialist healthcare ISVs to develop their applications using a common data model and set of transactional interfaces.

"If an ISV chooses to use the Oracle Healthcare Transaction Base, it means that their solutions automatically integrate with the Oracle E-Business Suite, and with the solutions of other healthcare ISVs using the Healthcare Transaction Base," explains Rada. "The solution becomes very compelling for customers who are already running horizontal Oracle applications, because there is no costly integration work required, and the single data model means that key data is "cleaner" and flows more easily around the organisation."

Avoiding Conflict

Rada says Oracle's Industries group works extremely closely with a core of about 20 ISVs with whom it has joint go-to-market plans, joint pipelines and joint development programmes. Outside of this core, hundreds of ISVs feature in Oracle's "industry footprints"; detailed maps of the needs of each focus industry outlining Oracle's solution and complementary solutions provided by ISVs for that industry market. The Oracle sales force is well educated in the need to include ISV solutions in their approaches to customers, and often takes a supporting role in tenders where the ISV has greater traction with that customer or in that industry.

This is an approach endorsed by UK-based ISV FWL Technologies, a provider of supply chain management systems to the Travel and Transport industry. "In some joint bids where there has been a requirement for a warehouse management system [which both companies offer], we have worked with Oracle to put forward what is best for the customer," says Dave Renshaw, chief operating officer for FWL Technologies. "That's what partnership is all about - we draw on our joint resources to provide a solution that best fits the customer's needs, even if it means one of us foregoing part of our solution."

A World Technology Leader

The recognition of the importance of ISVs, and the steps taken to collaborate more closely with the community, are areas in which Rada has seen a "significant improvement in recent years" due to the fact that Oracle's channel organisation has grown and matured considerably. The inclusive approach has contributed greatly to the growing numbers of ISVs joining the Oracle PartnerNetwork, combined with the recognition among vendors of the benefits of developing solutions on the Oracle technology stack.

One such vendor is Mantas, a global provider of transaction-monitoring systems for the financial services industry. "We found it very easy to build a relationship with Oracle, and the people we deal with at Oracle have been outstanding in their contribution to our R&D activities," says Stephen Epstein, director of product platforms at Mantas. "We have worked together to develop and test poducts on new platforms like Linux and blade servers, and the Oracle team have provided great direction on these new technologies."

"Oracle is the world's leading vendor of enterprise software," Rada says, noting that Oracle's integrated database and middleware technology offer greater opportunities to ISVs in terms of scalability and supported platforms than that of other vendors. Additionally, he points to the popularity of Oracle's horizontal applications in key industries like Healthcare, Public Services and Telecommunications, meaning that Oracle is able to generate leads for complementary ISVs through its contacts at the requisite business level within those industries.

Bottom Line

The bottom line is that Oracle's Industries programme needs to partner with ISVs to succeed, and has much to offer in return. "ISVs who are not currently working with Oracle have nothing to lose, and very much to gain, by starting a dialogue with us," Rada says. "Call us, come to our events and find out what we have to offer. You may be surprised by what you find."