Feeds

Oracle plans $1bn app outsourcing push

Major Offensive

  • alert
  • submit to reddit

Choosing a cloud hosting partner with confidence

ComputerWire: IT Industry Intelligence

Oracle Corp is planning a major offensive into the application outsourcing market, which it hopes will generate $1bn in additional sales over the next five years,

John O'Brien writes

.

Speaking at an analyst conference, chief financial officer Jeff Henley said: "There is a multibillion-dollar growth opportunity for Oracle in managing, administering and servicing our software for customers."

Redwood Shores, California-based Oracle said it would focus on getting 25% of its 12,000 customers to move to the ASP model, which it calls Oracle E-Business Outsourcing, where clients will rent remotely hosted Oracle applications for a flat monthly fee direct from the vendor. The company said it currently provides hosting and remote application services to 200 of its customers, which generates approximately $50m in sales.

However, it said that based on calculations, increasing this share to 25% of all customers over the next five years should enable it to generate $1bn in annual sales. Henley said Oracle has been making investments in new data centers and expansion overseas, and is providing incentives for its sales force to meet these targets.

Until now Oracle has focused its application outsourcing services on the small to medium enterprise market, through its Small Business Suite division, which partners with ASP Netledger, a company in which Oracle CEO Larry Ellison holds a stake. Small Business Suite provides a hosted version of Oracle's e-business applications and includes CRM, orders, purchases, inventory and payroll tools.

Oracle claims that its outsourced services have saved clients including Nuance, Paradigm Wireless and Benchmark between 44% and 66% in IT management costs.

The move is a big leap of faith for Oracle into a market that has so far spectacularly failed to deliver. ASP pioneers like USinternetworking Inc and FutureLink have already gone bankrupt, but despite this Henley said he is confident that the software-as-a-service model will be the future method of software delivery.

© ComputerWire.com. All rights reserved.

Providing a secure and efficient Helpdesk

More from The Register

next story
Preview redux: Microsoft ships new Windows 10 build with 7,000 changes
Latest bleeding-edge bits borrow Action Center from Windows Phone
Google opens Inbox – email for people too thick to handle email
Print this article out and give it to someone tech-y if you get stuck
Microsoft promises Windows 10 will mean two-factor auth for all
Sneak peek at security features Redmond's baking into new OS
UNIX greybeards threaten Debian fork over systemd plan
'Veteran Unix Admins' fear desktop emphasis is betraying open source
Entity Framework goes 'code first' as Microsoft pulls visual design tool
Visual Studio database diagramming's out the window
Google+ goes TITSUP. But WHO knew? How long? Anyone ... Hello ...
Wobbly Gmail, Contacts, Calendar on the other hand ...
DEATH by PowerPoint: Microsoft warns of 0-day attack hidden in slides
Might put out patch in update, might chuck it out sooner
Redmond top man Satya Nadella: 'Microsoft LOVES Linux'
Open-source 'love' fairly runneth over at cloud event
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.