Oracle makes total cost of ownership pitch to users

Computerworld - SAN DIEGO -- Looking to boost sagging applications license sales, Oracle Corp. is launching a number of sales and marketing initiatives it hopes will entice customers back into the fold.
Among the moves are a sales reorganization and the rollout of new applications that Oracle claims can be rapidly installed and will quickly deliver a return on investment by slashing operational costs and improving efficiency. The company announced the new apps yesterday at its AppsWorld conference here.
As expected, Oracle also showcased its Business Flow Accelerators, which are packaged offerings that deliver to customers specific workflows such as procurement. Users can buy the software at a fixed price for a fixed time and "come out of it with an automated business process," said Mark Jarvis, chief marketing officer at Oracle.
Jarvis also announced that Oracle would offer software via a hosted monthly subscription service aimed primarily at customers with revenue of between $10 million and $25 million and with up to 25 users. There would be no customization, only configuration, and the price would start at about $5,000 per month. He and other executives also urged users to consider outsourcing their applications and running the E-Business Suite on Linux, which is a viable way of boosting performance and radically slashing hardware costs over Windows-based and Unix platforms.
Although Oracle has been faced with a decline in new license sales, executives boasted that the number of conversions to the company's 11i E-Business Suite continues to grow, with about 53% of its 13,000 applications customers live and another 25% doing the migration. Jarvis noted that users of 10.7, slated for de-support in June, will still have access to support services after the deadline.
"We're not solving new bugs, but all information on current patches and the knowledge base will still be available to those customers," he said.
Oracle Chief Financial Officer Jeff Henley struck a note of cautious optimism regarding the company's finances, saying he believes the worst of the IT doldrums have already passed, with 2003 seeing a spending rebound. "There is still a lot of interest in and belief in technology," he said.
In addition, Henley said that the Oracle sales force is being reorganized. Overall account management will virtually cease and salespeople will sell either database and other infrastructure technology or applications. He acknowledged there would be some disruption in operations but hoped it wouldn't be extensive.
Joshua Greenbaum, an analyst at Enterprise Applications Consulting, in Daly City, Calif., thought the sales reorganization was key. He argued that Oracle,unlike rivals such as PeopleSoft or SAP AG, hasn't done enough selling into its existing accounts. "They don't know how to upsell," he said.
In addition, NetLedger Inc., which makes the Oracle Small Business suite, announced an upgrade to its customer relationship management product today. Customers will now be able to track competitors' progress and will have opportunity management and forecasting capabilities.

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