SANDEEP MATHUR, MD, Oracle India, talks to Sanjay Gupta in a free-wheeling discussion on the next big things for the vendor, its go-to-market strategy and, of course, the much-touted ‘engineered systems’ and how they can simplify the lives of IT managers and CIOs
You are now a Rs10,000-crore business in India. In terms of revenue what would be your next big milestones and what would be the two or three key things you plan to do to get there?
We do not talk about our revenues for India, so I can’t talk about that. What really matters for us at the end of the day is customer success and what customers’ partners are saying about the company. In terms of what we are going to do from now onward is that we believe India is a market with a very large appetite for cloud solutions. And when I say ‘cloud’, I mean literally in every single dimension—whether it is software as a service, platform as a service or infrastructure as a service. We have seen tremendous amount of momentum in that direction. Obviously, we’ve seen the private enterprises jump on to it very quickly, but I believe that even the government is going to start looking at the cloud very seriously. So we have to create more innovation in that market, because there’s a need for us to create these community clouds and so on. We are potentially the only company that has the entire structure to do that.
Globally, we have also announced IaaS for customers to do it behind their firewalls. So we are now offering [cloud] infrastructure at customer premises. We are ready to ship them hardware without a financing contract and say that you [the customer] can use this, and we also make this elastic.
What else is changing significantly for you?
Another area of focus for us is that most of our customers are transforming their businesses. For instance, a lot telcos, for whom voice is the major revenue source, are saying that it is going to be data. If you look at the banking industry, the players are going from urban to rural. Most people believe that the current revenue stream will become a small part of the future revenue stream. So, how can they straddle both of these spheres? They clearly need to start investing in the future. Given that they have limited budgets for such investments, they have to decrease their cost of doing existing business—and IT is a big part of it. And we are very maniacal on how IT can reduce your overall cost of doing business.
However, while doing that, you still need to have higher and higher performance. We are not saying that because you are reducing your budget, you will have to compromise on performance. We want to drive performance but do it at reduced cost. It’s tough for customers to understand that because it seems like a fairy-tale. And I say it all the time: when you agree to pay less for performance, you come to Oracle. The reason we can say this so confidently is that we have engineered our systems to work together.
It has been quite some time since you completed the acquisition of Sun Microsystems. But do the CIOs still look at Oracle and Sun as two entities or as an integrated whole? How has your relationship dynamic with them changed?
See, initially, we did get some negative press about the acquisition because a lot of people could not understand why a successful software company was going after a hardware player that was losing money. But if you look at everything we do, product innovation is at the heart of it and we realized that Sun had great product innovation. In India, everyone holds and has held both Oracle and Sun and now Oracle-Sun in high esteem because of our product innovation. And India has traditionally been a SPARC country, so we had to turn the business around so that it made money globally and come up with new products and solutions. Right now, Oracle puts in $5 billion into R&D in a year. But it takes a little while. So if you see the new products we have introduced, we are back on the rails as far as innovation is concerned. So this whole story of engineered systems that we now present to the CIOs is courtesy the fact that we own the hardware as well; infrastructure is a big part of it because the throughput comes from infrastructure.
There is a lot of noise about converged offerings such as engineered systems from Oracle or PureSystems from IBM. But how practical is it for customers to replace or upgrade their existing infrastructure with these new and supposedly expensive solutions?
First of all, they are not expensive, because the idea is you should be able to lower your overall cost and drive performance. If we are not able to prove that, there’s no reason why you would want to go out looking for them and buy these systems—and I’m not going to comment on what IBM’s strategy or anybody else’s strategy is.
Our strategy is, we are going to make the hardware and software work together. So the customer’s business case is built on that fact. The early adopters of such systems are always people who are hungry for performance. Earlier, the only way to increase performance, say, by 10 times, was to buy bigger and bigger systems; what we now provide is horizontal scalability. So if you want 10 times the performance but don’t want to pay 10 times, that’s where engineered systems come in. Basically, a tremendous amount of parallelism is happening in these systems.
Another argument in favor of engineered systems is around consolidation and management. Because it allows customers to consolidate a lot of systems, the management time of the IT staff gets much reduced. Furthermore, it’s not the customer who’s doing the R&D on these systems but we as the vendor—because traditionally, the customer would buy servers, storage and networking separately and put it together to form a unique system. Providing tech support in that case was difficult and time consuming as it involved components from several places. But now we can support and upgrade the entire systems quickly and easily. And then, of course, there is saving on space, power, etc., and the whole green angle to it.
Given that many of your competitors work directly in India for large technology projects, do you plan to extend your direct reach, apart from what SIs do for you?
Our touchstone is the customer: we’ll go by what the customers want us to do. We are an intellectual property company and that’s what we do the best; we are an engineering company at heart. Given that we have the world’s best system integrators sitting here in India, we would rather partner with them. But there could be situations where there is either a lack of skills or the customers want us to take ownership, then we would be happy to do it for them. But our main strategy is to work with partners and grow our business with them.
There is a new movement in IT, one that’s apparently driven by the likes of Apple and Google: simplifying the way IT works. At the same time, technology continues to be an even more complicated beast. What do you think of this ironical situation? Or do you think simplicity is still a mirage for IT?
Actually, it is the market demands and product offerings that are getting more complex. But we at Oracle have been at a simplification journey for quite some time. If you look at it, with engineered systems we have done to the enterprise market what Apple has done to the consumer market with its iPhone. If you look at cars, we do not buy the steering wheels and the engine and other components separately…a similar movement is now happening in IT where you are entering an era in which things come pre-tested and pre-installed and ready. What our mission in life is that we want to reduce the R&D that IT managers and administrators are doing today and to make things simpler and easier for them.
What in your view can Indian CIOs do more to make innovative rather than supportive use of technology?
I believe a big change in the thinking of CIOs has got to be that they should not think about ‘business as usual.’ Business as usual has to become a very small part of what they do on a day-to-day basis. Their focus has to move clearly to the business innovation side; they should aim to become a true partner to the business. Frankly, we are a company they can rely on to take care of the business as usual as well as their transformational needs.
