Oracle: Banking on the Cloud!

Q: What kind of opportunities are you seeing for Oracle when you say that you want to support this initiative, what can we expect from Oracle?

A: There are a lot of things, we are investing in many dimensions, we are working with all of these states to support a large number of initiatives, we are working with 20 states, many different programmes around smart cities, around a lot of different things, payments to help India go to the next phase in its development. So we are very optimistic, very engaged, we have got a big portfolio of solutions that can support that programme and we are putting all of that muscle we have, solutions we have and expertise we have to help it make a big progress.

Q: Any particular investment figure that you have in mind when you think of India or is it going to be on ongoing basis that you would be investing in the country?

A: We have a ready huge presence in India. We have 33,000 people here working, we have got 11 research and development (R&D) centres across the country in many different states. We just embarked recently on the big recruitment programme around the region in particular in India and meet those objectives much faster than we thought. So we are increasing the team very rapidly just to support that programme and the cloud in general because this is what is needed for India, it is the right solution at the right time and we have got the right resources, IP to make it happen.

Q: I am going to come to the topic of Cloud a bit later but we are talking about India in comparison to the other markets, how is it fairing out, do you think that the demand for IT, for different types of solutions, for internet of things is growing in the country when you compare it with other markets?

A: Yes, it is growing and in many respects it is growing faster here for many reasons, you have got the millennium, you have got all the new generation coming which is hungry for social media, for mobility and all of those things. We bring all of those solutions, we make them real, we make them happen so we think that there is a huge impetus there and we want to participate, we want to help. So yes, I see more acceleration in India and I see brighter future in India in the next ten years with the population of new bright people, with the education system and with this programme, digital India we can make huge things happen.

Q: Talking about the Cloud business, Oracle has been a late entrant though you are steadily delivering results, there is a sense among some analysts at least that the company's Cloud business is not going fast enough to catch up with the decline in its revenues owing to low revenues from the data base business, how far do you think this is correct and in what manner are you going to breach this gap?

A: I don’t believe it is completely correct. Just look at the last financial year result, which were published this summer. Our Cloud bookings goal was over 200 percent. So we are seeing that around the world and again in particular in India, we are seeing explosive growth in our Cloud business, which is more than compensating the traditional business. We have been embarking the Cloud journey three years ago and we are seeing massive acceleration, the customers here in India are very excited about what we can do and what they can do in the Cloud with us. So this is a phenomenal acceleration.

What is important to understand is that the Cloud is big and the Cloud is going fast though traditional IT is not going to go away in just one year or two years, it is going to be there in 10 years. So the question is how do we have a solution, which allows customers to leverage the innovation of the public Cloud but also to leverage their existing IT systems, infrastructure, applications that run their business today but should transform that into private Cloud to have the benefits of the Cloud on both sides, public and private. This is what we call hybrid Cloud and this is the way we bridge that transition to Cloud and that transition will last for the next 10 years.Q: The issues of cyber security are also going to be there that would need to be addressed, there is also an issue of stiff competition that the company is facing from existing players like IBM, Microsoft, how are you going to manage all of that and create a niche for yourself?A: The companies you mentioned -- you could have mentioned Amazon also -- are companies that are mostly playing in the infrastructure layer. So this is a basic infrastructure commodity to Cloud. What matters for our customers to differentiate to win more market share, to service that customers better is what happens on a higher layers -- to the application layer, how do you manage your employees, how do you manage your customer relationships, how do you serve them better and how do you launch new services, new products efficiently this is what the software as a service layer provides and then the platform as a service is the layer which ensures that your data are managed in an efficient, secure way, below all of that is infrastructure as a service.We play on those three layers, most of the companies you mentioned play just on the bottomline or maybe two of them, we are the only player that has the complete solution from software as a service, platform as a service, infrastructure as a service. The integration of all of that makes us unique and our ability to do it for public Cloud or private Cloud makes us completely unique.Q: Is Small and Medium Business Enterprises (SMB) a segment that you are going to be looking at? So are you going to make any special launches for them given the price that traditionally Oracle is viewed to be offering more expensive solutions vis-à-vis the competition?A: You are right. There is something new happening in SMB because of the Cloud, but let us not forget we have already 300,000 customers in SMB today so we have a huge presence in that segment of the market worldwide and in India. Now with the Cloud, we are able to offer new services, new solutions where there are classic things like Human Resource Management (HRM) or more advanced things like Internet of Things (IoT) or Big Data, make that accessible to SMB customers at a much lower price point so the offer is very valid. This new era allows for that and allows us to serve those customers better.Q: You did mention about Amazon and at a recent conference at Vegas, there was a mention in a convoluted way, to Oracle and its pricing strategy and whatever customers the company is going to be Amazon is going to be taking them on. With such stiff competition are you also planning any strategy to counter competition as aggressively as competition is trying to stop your company from taking a leap forward?A: Amazon can play in the lower segment of the Cloud as I said and the bulk of the debate with our customers is on the application layer and the web services layer, what helps them differentiate. So this is the place where we focus a lot of our energy. All of the is powered by the platform as a service and the infrastructure as a service, which we provide but the debate happens at that layer and this is what the customers that we are meeting all the time ask for.Q: In terms of setting up data centres in the country, there has been an insistence from the Indian government that companies should in some fashion invest in data centres and that is one of the reasons why you saw companies like Microsoft and IBM set up data centres in India in the first place. There has been an indication from Oracle as well that you would be setting up data centres. By when can we see that happen and what kind of investments in the data centres would you be making?A: This thing of the data centres is an important topic but let us look at what happens already today. Today we have huge growth and a huge acceleration of our Cloud business in India, including in the government, for example in the police services. So the notion of this as a centre is something which is an interesting conversation led by companies, which are mostly in the infrastructure as a service playing. It is not something which is in the way of serving customers in India and growing very rapidly, as we are doing in India. Now that being said, we are investigating, we are evaluating and we will make decisions in due time but we are actively looking in this._PAGEBREAK_Q:  As far as Cloud computing is concerned and if you look at the Indian market it is still in its very nascent stages. How do you think the productivity, the utility of Cloud is something that can be communicated to an Indian customer and bring them onboard or are you already seeing trends where companies are embracing Cloud computing technologies?A: We are seeing those trends. Customers in India are very tech savvy, they understand what Cloud can bring them to accelerate their business or improve it and so they are very interested, excited, intrigued and experimenting and some of them are going live in a very big way with Cloud implementation. So we absolutely see that today already. It is very encouraging.Q: There was a recent report that The National Association of Software and Services Companies (NASSCOM) had come out with, and today a study is saying that in 2016, IT spending of companies will grow by about 1.6 percent to the range of 2 percent and India is going to be a focus market for companies. So with that potential in mind, what kind of opportunities do you see for companies like yours?A: So you meant probably one percent growth and it is not looking as a very high growth for the overall IT business. The particularity of Oracle, which is very different, is that we can help customers make more of their IT budget, whatever that IT budget is and we have seen declining economies where the IT budget was declining very fast, like in South Europe. When there was the big recession a couple of years ago, and our business has increased in that period a lot and our growth has accelerated in that period. This is because we can help our customers take the best of the good times and grow faster, provide new services, but we can also help them streamline their operations, optimize, do more with less with our solutions.So both sides we can play, both sides we can help the customers. The one percent growth of the IT overall budget is hiding a massive shift inside there, from old things to new things, to the Cloud and that is where we play. So we benefit from that shift which is under the surface of this one percent growth of IT.Q: The cuts in the IT budgets you feel would not have an impact.A: Not on us. We can help our customers in any way.Q: You have been driving transformation at Oracle, now at this point in time, how do you think things stand and what is the way ahead for you?A: The way ahead for is to have teams at oracle that can support our customers in this massive transformation. This is a big transformation. This is something that happens once every 15 years in IT and we are just entering that, it just started a couple of years ago. So it is about transforming us to leverage all of the investments our customers have made in technology and help them use those investments and transform them into cloud and something that helps them grow and develop themselves. So this is a transformation we are embarking on or have embarked on in the last three years, very successfully as you can see from our numbers.Q: And what are going to be the focus areas? One would definitely be Cloud and which will be the other priority areas?A: Cloud, Internet of Things, Big Data, Mobility, Social, these are big things where customers are thinking how can they watch what are people saying on their brand on social media, how can they understand better the behavior of their customers to serve them better and launch new services, that is Big Data, how can they empower their users, their customers through mobility to interact with them, how can you launch new banking services available to every mobile subscriber without having a branch or an ATM. These are all the topics which are hot currently and where technology enables complete new business models.Q: But things like Internet of Things and Big Data are also being seen as disruptive to the overall IT market space. But I understand this is not something that is going to impact you in any way and you are going to see an opportunity in it.A: It impacts us very positively because we bring more value to our customers with that. Helping our customers make sense of the huge quantity of data that they are accumulating every year, makes sense of that to make more educated decisions, target one of their customer better, offer him the right service at the right time through the right channel. Now these are things which were difficult to do before and we can now do because Big Data gives our customers that intelligence. I could say the same on social networks and Internet of Things is also a very exciting field. So we see those things are huge opportunities, they are new waves of technology which drive new services, and for us, more ways to serve our customers and more business.Q: And when you talk about mobility, do you mean a mobile technology, or is it going to be like Microsoft has been saying "making people more mobile" and not necessarily mobility in terms of telephony and technology.A: I mean by mobility bringing things which were normally accessible in a physical branch or a retail store or you have to go somewhere or you have to be on the internet but being able to do that on the go from wherever you are, there are many places in India and in many countries where people do not have access to those brick and mortar services and they cannot have access to them directly on their mobile. So bringing those services to the mobile is a way to bring new economic opportunities, new developments at the granular level, which you could not do before.So we view that as very exciting. When you compare the number of people who have got a mobile subscription to the number of stores where they can do banking or whatever services, there is a big difference. It is exciting to be able to use the mobile.Q: While directly e-commerce is not something that is on you agenda, with the lines between the media technology and e-commerce companies getting blurred do you foresee that as that being a potential investment opportunity, 10 years down the line or maybe actually sooner than that?A: Sooner than that. We are  powering e-commerce to a very large extent. So our customers whether they are retailers, or even government, doing digital interfaces, interactions with a citizen or with a customer is something that we power, we provide the underlying technology that allows for those interactions to be done digitally, e-commerce. So it is a very exciting field for us.