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Q&A: Oracle's David Krauss on Line-of-Business Managers and Cloud Technology Investments
Increasingly, line-of-business (LOB) managers are driving technology spending. In recent years, their share of IT spending has increased as much as 20 percent, even as IT spending overall has actually decreased as much as 5 percent.
We asked David Krauss, senior director, Oracle Cloud Applications and Services, to explain the business and technology drivers behind the phenomenon—and to provide guidance to LOB managers considering their own initiatives.
Q. What is driving the increase in LOB technology spending, even as overall IT spending remains flat?
A. Cloud computing is democratizing the way we buy and use technology—and driving the transfer of power from IT to line-of-business managers. With software as a service (SaaS), you no longer need a heavy, homegrown infrastructure to run applications. You are buying a service and paying for it on a usage or subscription basis, similar to the way people pay for utilities. That is ideal for business managers, who want to adopt solutions quickly, get exactly what they need, and pay for only what they use—without waiting on IT. That's why Chief Marketing Officers are expected to outspend Chief Information Officers on technology as soon as 2015.
Q. What advantages do SaaS solutions have for an LOB manager?
A. Business managers tend to be focused on realizing business value as quickly as possible, and SaaS can dramatically speed time to value compared to traditional approaches. SaaS also frees LOB managers to really focus on business value, without having to coordinate with IT to implement, run, and maintain solutions.
LOB managers also like the fact that, as with a utility, you can budget a SaaS solution as a predictable operating expense. No need for large, upfront capital expenses, and no need to assume the risk of unpredictable ongoing operating expenses.
Q. What pitfalls should LOB managers avoid when selecting a cloud partner?
A. Cloud computing changes how we innovate, but getting more-complete information to make better business decisions more quickly is still the goal. Executives and LOB managers need visibility across systems, and that doesn't happen when you create lots of information siloes. A recent report, “Cloud for Business Managers: the Good, the Bad and the Ugly” estimated that one in two cloud applications is abandoned, most often because of integration problems. At the end of the day, what looks like a quick, easy solution can limit long-term return on investment.
It is also really important to consider compliance and data security. A heterogeneous approach with multiple providers not only involves greater management complexity but can also entail more potential risks.
Q. What makes Oracle's SaaS cloud strategy stronger than that of its competitors?
A. You can divide Oracle's cloud competitors into two different buckets: niche SaaS providers and traditional enterprise resource planning (ERP) providers with SaaS offerings.
Unlike niche providers, Oracle can offer a complete set of solutions on a single, integrated, standards-based platform. Besides avoiding information siloes, Oracle customers can customize and extend SaaS applications using Oracle’s integrated platform-as-a-service (PaaS) services, all of which leverage the same tools and development languages their IT departments are already familiar with. This helps save money and time.
And compared to large ERP competitors, Oracle clearly offers the most modern, complete, and integrated set of offerings—not just a bunch of solutions that have been cobbled together. That includes rich support for social and mobile—and rich, role-based business intelligence that is embedded into business processes.
Q. What is the best way for Oracle customers to begin to adopt Oracle’s SaaS offerings?
A. Because of Oracle's complete, integrated, standards-based approach, customers can take an à la carte approach to SaaS. SaaS applications can easily coexist with their existing on-premises applications—something niche providers can't deliver. There is no need to rip and replace. You can begin to take advantage of SaaS solutions today, continue to reap value from your current investments, and still have confidence in your investment going forward.
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