Apotheker: It's a piece of cake. The most interesting and value-added part of any implementation, however, is never the technology, but rather how to extract business value from technology. And that's where we'll help our customers. We have programs for this.
IDGNS: Salesforce is a name in the SMB area. Is the company's hosted, subscription model something for you to duplicate?
Apotheker: The real question is whether Salesforce is a good model for users? A subscription model is just another way of paying for software. Despite all the propaganda, Salesforce sells software, and it's not very good software -- but that's another matter. There's also a price issue. When you do the math, you'll discover that after two years, you pay more than you would if you had installed the application inhouse.
IDGNS: What about hosted services in general?
Apotheker: I can imagine that in some situations, it makes sense to have a hosted solution. The real issue is whether customers, particularly midsize companies, are still in control of their business processes. When you farm these out as you do in the Salesforce model, you can't bring them back in. Studies show, however, that the vast majority of SMBs prefer to keep control over their processes.
IDGNS: Don't you offer hosted service?
Apotheker: Yes, but we've always included a clause that we can port the application into the customer. It's been our experience that SMBs want to keep inhouse those business processes that are of real differentiating value. I think Salesforce is a fashion. They've found a niche.
IDGNS: Oracle made some midmarket announcements prior to Sapphire. Surprised?
Apotheker: No, Oracle is the greatest 'me too' company on the planet. Retek is a good example; PeopleSoft too. Oracle is a company that knows how to react.
IDGNS: Oracle is in all the markets you're in, right?
Apotheker: Yes, they're positioned in the low, mid and high market. But whether they're successful is another question. Just look at our first quarter results in 2005. We sold more software licenses in the U.S. than Oracle, together with PeopleSoft, sold worldwide.
IDGNS: But Oracle seems prepared to play hardball. Aren't you a bit concerned?
Apotheker: Make my day. Go ahead and play hardball. They don't even know what hardball is.
IDGNS: Aren't you worried about Oracle's next move after Retek?
Apotheker: There is a difference between rational and irrational behavior. What we announced with The Home Depot shows that we didn't desperately need Retek. We have expertise in the retail sector. Acquiring Retek would have been nice. The company has good people and some bits and pieces of technology that would have fit into our portfolio. But we were only willing to pay a given price for that.
IDGNS: Do you see another retail opportunity out there?
Apotheker: You'll be the second to know.
IDGNS: How about pricing? What's all this talk about value-based pricing?