Scale to FitBy David Baum
Oracle sizes enterprise solutions to fit efficient and flexible midsize businesses.
Today’s midsize businesses require sophisticated IT environments that enable them to compete on a global playing field, often with much larger firms. They need an infrastructure that is cost-effective and efficient, yet flexible and scalable when it has to be. Most midsize companies don’t have huge IT budgets, however, and getting what they need with what they have can be a challenge.
Oracle provides programs for sales, customer service, and consulting that focus on the needs of midsize businesses. These programs deliver scalable, flexible, and cost-effective technology and applications solutions that are tailored to industry- and customer-specific needs.
For example, Qtrax turned to Oracle to help devise an IT architecture that could support millions of concurrent users for its music service. As the first free, legal, peer-to-peer digital music business, Qtrax works directly with record labels and publishers, licensing their content for distribution online. Qtrax’ implementation includes Oracle Database; Oracle Real Application Clusters (Oracle RAC); Oracle Enterprise Manager; and components of Oracle Fusion Middleware, including Oracle Application Server and Oracle Coherence.
“We decided to go soup to nuts with Oracle, with an identical infrastructure at data centers in Los Angeles, London, and Hong Kong,” says Christopher Roe, chief technology officer at Qtrax. The Los Angeles site is in production. London has been tested with more than 500,000 concurrent users and has now been ramped up to test 1 million concurrent users; Hong Kong is still in testing as well. The company has leveraged the Amazon Elastic Compute Cloud for testing.
Roe is confident that the Oracle technology will support the company as it grows. “This infrastructure can handle more than 1 million concurrent users,” he says. That means that the company’s IT investment will pay off.
“We know that the investment we’ve made in Oracle technology will enable us to become a billion-dollar company,” Roe says. “We won’t be handicapped a year or two down the line because our infrastructure can’t support our growth. We’ve created a foundation on which we can build a four-story house or a 100-story skyscraper.”
Qtrax leveraged Oracle’s newly formed emerging markets organization, which is part of Oracle Direct, to get the project off the ground quickly. Since the emerging markets organization works solely with growing companies, the team could focus on the unique needs of Qtrax, thus helping the company achieve its goals. In three months, the project was done. “We started development in November of 2007, and we met our launch date of January 28, 2008,” Roe says.
Each of Qtrax’ data centers has between 20 and 30 servers, with an application grid based on Oracle Coherence and a database grid built around Oracle RAC. “The idea with grid computing is that no matter what happens, our service is up 100 percent of the time,” Roe says.
This highly available IT infrastructure supports Qtrax’ business model: Music lovers can discover new music and legally download their favorite songs while Qtrax uses Web site advertising to compensate the artists and record labels. Qtrax will also sell analytics back to music labels, distribution partners, advertisers, and retail outlets. Content is stored in an Oracle database, and analytics are performed using Oracle’s business intelligence (BI) technology.
“Leveraging BI enables us to understand what users are doing both on our desktop application and on our music portal—something that is a first for global music delivery worldwide,” says Roe.
Qtrax’ investment in Oracle software delivers. “Because of our end-to-end Oracle infrastructure, the music will always be available when customers want it,” Roe says.
Oracle’s emerging markets team has two primary goals in working with companies, according to Matt Benelli, vice president of emerging markets at Oracle.
“Our first goal with the emerging markets organization is to make it easy for growing concerns to do business with Oracle,” he says. “Secondly, we help ensure that customers get the most value from the software. This is critical for all customers—especially those in their embryonic stages. These companies are the primary reason that the emerging markets organization was formed within Oracle Direct. We want these customers to grow with Oracle.”
Oracle Direct’s emerging markets team also helped Syndero, an internet marketing company that develops and markets consumer brands for health and beauty products, visualize the potential of BI technology. “We’re constantly testing different variables to see which ads pull best [attract the most buyers] and to determine optimum price points,” says Andrew Platts, director of database engineering at Syndero.
Platts participated in a demonstration of Oracle Essbase conducted by an Oracle BI expert, which revealed the potential of Oracle Essbase for Syndero’s business. “Using a sample of our own data, he demonstrated how when you use Oracle Essbase with Oracle Essbase Visual Explorer, data jumps out at you rather than [making you look] at hundreds or thousands of cells on a spreadsheet,” says Platts.
Syndero evaluated Oracle Essbase and other leading BI products with the goal of enabling business users to produce reports with minimal IT staff involvement. Syndero had used MySQL relational database technology and an open source reporting system called Pentaho, but these software products didn’t have the flexibility that the rapidly growing company needed for its reporting and analysis.
“A lot of startups use open source technology because they assume they can’t afford to pay licensing costs,” says Platts. “But you have to consider the total cost of ownership of these tools. [With Oracle], time savings mitigate the cost.” Oracle offered Syndero a flexible payment plan and licensing terms and helped with technical explanations of specific analytic scenarios.
Syndero favored Oracle Essbase for its tight integration with Microsoft Excel and because it enables everybody to come to the same place for information. Syndero also purchased Oracle Business Intelligence Suite, Enterprise Edition Plus, which supports Oracle Essbase as a physical datasource. “[Oracle] Essbase helps us to improve customer satisfaction by selling the right products to the right customers at the right price,” Platts says.
Syndero’s database experts liked Oracle Business Intelligence Suite, Enterprise Edition Plus’ exception-based reporting—the ability to alert business users when predefined thresholds are reached. Syndero implemented the software along with Oracle Essbase.
“We spend a great deal of time analyzing sales metrics such as cost per acquisition,” says Platts. “How much is it costing us to acquire customers? How long do the customers stay with us? What’s the retention? We use that information to better target advertising.”
Mark Konetchy, a database administrator at Syndero, adds that the company also needs to analyze which product combinations work best for its continuity programs, in which customers receive products every 30 or 60 days. “To maximize profitability, we continually analyze the continuity cycle to improve retention,” he says. “We used to spend hours gathering data and delivering it to the analytics group. It’s a 10-minute job in Oracle Essbase.”
Syndero’s database experts now use Oracle’s BI software to analyze complex metrics such as lifetime contribution margin, which reveals the profitability of each customer by calculating the cost of goods sold, cost of advertising, cost per acquisition, and other variables. “We’re trying to boil all that down to one number,” says Platts. “With the Oracle BI software, we hope to determine that number much sooner so we can predict how a particular blend of creative and placement will make money.”
If this kind of analysis sounds more suited to a financial giant than a midsize marketing business, it’s no wonder. Companies of all sizes need good information to run efficiently—but they don’t have huge amounts of time or resources to spend. According to Judy Hodges, a research manager at IDC who covers the midsize business sector, emerging businesses need an IT environment that is ready to go quickly. “These companies want applications that they can implement rapidly. They simply don’t have the time or resources to manage lengthy implementation cycles,” she says.
Christopher Roe at Qtrax concurs with Hodges’ assessment. “Oracle proved that they can work with small businesses just as well as with enterprise-class companies,” he says. “For starters, you can download most Oracle software for free, which enabled us to do a lot of early-stage development with no up-front investment. Oracle was also very supportive in terms of the services they offered. At one of the first meetings, they brought 15 engineers to the table. We felt like“wow, here is this multibillion-dollar company that wants our business and is willing to grow with us. They didn’t just see who we are, they saw the potential of who we want to become, and they were willing to invest in that vision.”
David Baum (firstname.lastname@example.org) is a freelance business writer based in Santa Barbara, California.