Betsy Burton

1
Oracles E-Business in Transition

• Betsy Burton

2
Oracles Strategy vs. Market Pressures
Inter-organizational Challenges
User Perceptions
App. Dev.
App. Server
ERP
Integration
DBMS
CRM
Internet Computer
ASP
E-Business Backlash
Negotiation Risks
Consulting
3
Single-Vendor vs. Multivendor Strategy
Ill run uptown and drop off the shipment. Then
I can go back downtown and pick up lunch. Then
well go back uptown to call on my customer.
Yep, I know how to get there! The best way is
take I25 and then take highway 3. Ive been there
lots of times. Ill show you the way.
4
Oracle ERP
Vertical Strategy
Role
Strategic Objective
Domain
Data
Opportunistic
Function
Architecture
Process
Asset- Intensive
Discrete
Service
Process
2001 2005

• Challenges
• Vertical execution
• Release 11i track record
• Depth of offerings

• Strengths
• Integrated technology stack
• Viability
• Solution Breadth

5
Large Enterprise CRM Suites Vendor Functionality
Ratings
Data Mart/ Analytical Software
Incent.Comp.
Content Mgmt.
Call Mgmt.
E- Service
FieldServ.
Campaign Mgmt.
Person-alization
ISS
PRM
OMS
SCS
Nortel
Oracle
PeopleSoft
As of 8/01
Ratings Key Meets a few expectations BOB,
missing some requirements BOB, meets the
majority of requirements Leadership status
Vendor has yet to demonstrate
functionalityin the area, i.e., it is not yet an
active player Through partnership (i.e., the
vendor does not resell the product or provide
first-line support)
6
Oracle CRM Vendor Overview
Leaders
Challengers
Insurance/
Healthcare
Banking/Brokerage
Manufacturing
High Tech
Retail
Pharmaceutical
Telecom
Sales Configuration
AbilitytoExecute
Automotive
B2B Suite
B2C Suite
TES
Sell-Side E-Commerce
U.S. in Millions
OMS
6,000
Relationship Optimization
E-Service
5,000
Customer Service
4,000
3,000
As of 9/01
2,000
Niche Players
Visionaries
1,000
Completeness of Vision
-
3Q99
4Q99
1Q00
2Q00
3Q00
4Q00
1Q01
2Q01
7
Magic Quadrant Platform Application Server
Vendors
Challengers
Leaders
BEA/WebGain
IBM
Oracle
Sun/iPlanet
Microsoft
Iona
Sybase
HP
Borland
Fujitsu
Macromedia
SilverStream
Fujitsu-Siemens
Lutris
Persistence
Brokat
Hitachi
As of 8/01
Visionaries
Niche Players
8
Oracle9i DBMS Real Application Clusters (RAC)
Update customer order 89023
Update customer order 89024
Update customer order 89023
Distribute Lock Manager
Update customer order 89024
9
Oracle Data Warehousing
Challenges
Strengths

• Market leadership and mind share
• Performs well on SMP and NUMA
• Supports tool and BI vendors
• Implements midsize data marts and data
  warehouses with low concurrency

• Lack of effectiveness on DMPP platforms
• Concurrent query performance
• Query optimization for complex data models
• Data partitioning usage
• Manageability
• Unproven with increasing size and
• complexity

Oracle for Sun
Query Performance (6)
Common Topology
Concurrent Query Management (3)
Operational Sources
Proven DW Track Record (5)
DM
Lots of Data Marts
Platform Suitability Scalability (8)
Data Administration (6)
DM
DW
DM
DM
DM
Data Management (6)
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In Search of Oracle Terabyte Data Warehouses
Large Financial Institution ? 15 large data
marts (several are more than a terabyte in
size) ? 14 DBAs full-time to manage (six
traditional DBAs) ? 16TBs of disk storage, 3TBs
unique Large Telecommunications Enterprise ?
Marketing analysis (data mart with simple data
model) ? Five DBAs (three senior level and two
junior level) ? Sun E1000 (64 CPUs), 6TBs of
raw data ? 12 users with three to four
concurrent queries Midsize Retail Enterprise ?
HP Superdome (64 CPUs), 10TBs disk, 2TBs raw
data ? 250 base data tables ? Two full-time
DBAs and four analysts to assist end users ? 60
concurrent queries, 1,600/day
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Lots of BI, Little Integration
Managed QR
Static reporting
Disco- verer
OLAP engine
Reports
Oracle9i OLAP and Oracle9i Data Mining
Business Area
Oracle9i
Darwin
OLAP catalog
Data Dictionary
Metadata
CRM
OWB
OWB Repository
DWH
ERP
Data sources
12
Oracle Announces License Changes

• DBMS License Model
• Enterprise Edition (EE)
• Standard Edition limited platforms
• Internal or identified external users
• Named user and processor-based
• Perpetual or term licenses
• Application License Model
• Application user minimums vary
• Very granular business metrics
• Product bundles
• Extensions priced separately
• Primary usage
• Application-specific models

• Changes
• Eliminated Universal Power Unit licensing on 15
  June 2001 for new purchases
• Introduced per-processor pricing
• Changed named user license options
• Reduced standard discounts
• Extended two- and four-year term licenses to all
  products

13
Power Units vs. Processor
Standard Edition
CPUs/RISC
1
2
4
Megahertz
450
450
450
Number of UPUs

675
1350
2700
Old UPU List Pricing
10,125
20,250
40,500
New Processor List Pricing
15,000
30,000
60,000
Enterprise Edition
CPUs/RISC
1
2
4
6
12
Megahertz
450
450
450
450
450
Number of UPUs
675
1350
2700
4050
8100
Old UPU List Pricing
67,500
135,000
270,000
405,000
810,000
New Processor List Pricing
40,000
80,000
160,000
240,000
480,000
Costs represented in US Conversion rates may
vary.
14
Conversion Factors

• Conversion factors given by Oracle
• 1,000 Universal Power Units One processor
• 1,000 UPUs _at_ 100 per UPU plus 68
  percent discount 32,000 per processor.
  Enterprise Edition 40,000 per processor. At a
  20 percent discount, the cost 32,000.
• 75 concurrent devices One processor
• 150 named users One processor
• Each concurrent devices Two named users
• Each named user has a value of 800
• 150 named users 800 120,000
• Conversation factors for a named user or
  concurrent user are not favorable at this time
  negotiate for a net-to-net trade in.

Costs represented in US Conversion rates may
vary.
15
When Do You Win in Converting?
Conversions Examples Number Total
MHz per Total Converts to Machines
CPUs CPU UPUs
processors 8 32 450
14,400 14 4
16 500 8,000 8
4 16 900 14,400
14 Conversions to the per-processor
model would require additional licenses for this
example. Note Calculated by four CPUs per
server
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Negotiation With Oracle

• 1. Establish a negotiating team with
  representation from all participating business
  units.
• 2. Define requirements over two to three years
  with focus on funded projects.
• 3. Perform a physical inventory of Oracle
  licenses and current contract terms understand
  new models and terms. Compare with the new
  proposal.
• 4. Determine whether the purchase can be made
  under the current agreement. Weigh re-licensing
  benefits against the loss of favorable terms.
• 5. Balance the additional discount with potential
  shelfware.
• 6. Leverage competition.
• 7. Plan to sign deals at Oracles quarter or year
  end

17
Oracles Changing Business Model
Service Offering
Technology
Product
Profitability
Examples sales.oracle.com iHost
Examples DBMS App. Server
Dual Allegiance
ASP and Consulting
Partnerships
Completeness of Solution
18
Oracle The ASP and MSP for Oracle
Hardware Is Located at the Customer Site
Hardware Is Located at Oracle
1. Oracle 11i Product Suite (pricing is based on
a per-model basis, similar to standard licensing)
License (Term or Perpetual)
2. Application Product Support
22 Percent per Year
3. Implementation(based on the online life cycle)
Fixed Fee/Fixed Scope
4. Managed Service Components Application
Management Database Management Systems
Management
3 Percent per Month
5 Percent per Month
5. Hardware Management
19
Oracle Vendor Overall Rating Positive (As of
10/01)
Initiative ERP Applications SCM CRM
Application Suite Application Server DBMS Compl
ete BI/Data Warehousing Pricing Model Sales
Tactics Services (Consulting ASP)
2001 Positive Negative Positive Negative Stro
ng Positive Negative Negative Positive
2006 (0.8 probability) Positive Positive Strong
Positive Positive Strong Positive Negative N
egative Positive
The evaluation scale is based on Gartners
assessment of the vendors vision and execution
for a product or service, relative to Gartners
analysis of clients requirements. It is not
intended as a comparison relative to competitors
in the market.