When it comes to Oracle Corp.'s on-demand software business, the normally outspoken vendor has tended to be somewhat reticent about how it defines both the scope and focus of its operation. Recently, however, the company has begun to talk more openly about software-as-a-service (SaaS), an approach that it sees as applicable to all Oracle offerings.
Earlier this month, Oracle revealed it had more than 2,200 on-demand customers, representing more than 1.7 million users. In its most recent financial quarter ended Aug. 31, 2006, the vendor reported that its on-demand revenue rose 48.8 percent to $125 million, compared with the year-ago quarter.
IDG News Service talked this week to the man who heads up Oracle's on-demand operations, Juergen Rottler, the company's executive vice president of Oracle Customer Services. An edited transcript of that conversation follows.
IDGNS: What's Oracle's take on on-demand software?
Rottler: There's a lot of interest and hype in the marketplace around on-demand, particularly in the salesforce automation space, whether it's RightNow [Technologies Inc.] or Salesforce.com Inc. or our Siebel CRM On Demand. Oracle is the only company that can offer an overarching on-demand platform for all applications and for all business processes and for different technologies -- database and middleware -- it doesn't have to just be applications.
IDGNS: At last month's OpenWorld conference, Oracle Chief Executive Officer Larry Ellison described the company's on-demand business as the same size as Salesforce.com's; is that correct?
Rottler: It's very hard to compare our businesses; it's a bit like an apples-to-oranges comparison. We have so many different deployment options and we don't count software licenses and support as part of on-demand revenue. I'll stick with Larry's statement from OpenWorld.
We're a very large company. As a part of Oracle, on-demand isn't a huge business, but we have a very significant interest in it.
IDGNS: How does your approach differ from that of, say, SAP AG, which appears to be adopting a more cautious approach to on-demand?
Rottler: SAP is struggling in this space. They see it more as an on-ramp as driving users to more traditional [on-premise] software. We've been in the on-demand business for nearly seven years. It's influenced our development priorities, how we run our business and it's influenced our data centers. We really have an on-demand platform. We see partners take that platform for applications across the entire enterprise.
We have on-demand versions for all of our applications including the ones we acquired. We've a revamped release of PeopleSoft Enterprise On Demand and we have Oracle On Demand for Siebel CRM as well as Siebel CRM On Demand. We have all our retail 'on-demanded' -- Retek and ProfitLogic -- and our G-Log logistics. We're working on a Portal solution.
IDGNS: Who does the bulk of the hosting of your on-demand software -- Oracle or your partners -- in percentage terms?
Rottler: In most cases where partners are hosting, it's because the customer already has someone to outsource their software. Depending on the geography, it's in the 20 to 30 percent range. The majority of our business is hosted out of our data centers.