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Oracle, SAP are roadkill: Technology One chairman

Technology One chairman Adrian Di Marco takes aim at Oracle, SAP

The business model used by Oracle and SAP is fundamentally flawed and will lead to their downfall within the next decade, said Technology One chairman Adrian Di Marco.

Speaking exclusively with Computerworld, in a wide-ranging interview Di Marco said that the fact that SAP and Oracle use third party implementers has lead to growing customer dissatisfaction.

“Oracle and SAP are expensive, and the question is whether they are delivering value for money,” Di Marco said. Technology One competes with Oracle and SAP for mid-range businesses, educational institutions and municipalities that turn over between $250 million and $2 billion.

Di Marco said his company has a competitive advantage because it does its own implementation. “People are replacing Oracle and SAP in our target market with our new generation Connected Intelligence product,” he said. “It’s a vindication of our strategy of developing in Australia, doing our own R&D and doing our own implementations.”

He also called into question Oracle, and to a lesser extent, SAP’s acquisition strategies. “Buying Sun just doesn’t make any sense at all,” he said, of Oracle’s recent decision to acquire the iconic Silicon Valley brand for $US7.4 billion. “A decade ago, who would have thought that a brand like CA could fall, yet it has,” he said. “The same thing will happen to Oracle and SAP.”

He also called into question the viability of cloud computing in the enterprise space, saying that it was at least a decade away. “It’s a point solution – like Salesforce.com – as opposed to an enterprise solution,” he said. “There is a minefield of issues for enterprise, such as where the data is, the security and protection aspects of the data in the cloud,” he said. “We simply aren’t seeing it as a big thing.”

Where it will make inroads, he said, is with early-stage companies that are geographically dispersed and agile. In fact, it’s these agile companies, he said, that will come along and out-innovate the incumbent players. Technology is a process of renewal, and the incumbents aren’t always willing, or able to take advantage of new technologies or new ideas, he said.

He points to the iPhone as an example; it took a company from outside the telecommunications space to show the big players – Samsung, Nokia and Motorola – that a phone was essentially a software-based device. “And the thing is that something like the iPhone could have been done in Australia,” he said. “I firmly believe it.”

That’s because Australia has outstanding R&D and great educational institutions. We also have to learn how to do things on a budget, he said.

“The problem is that we don’t build enough IP [intellectual property] in Australia. We’re still stuck in that mentality of digging things out of the ground. The NBN is the one exception to this, and even that is aimed at old industries rather than encouraging new ones.”

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

More about: CA Technologies, Motorola, Nokia, Oracle, Salesforce.com, Samsung, SAP, Technology One

Comments

1

Nexus

Sat 30/05/2009 - 09:29

All ERP's could be Roadkill very shortly

The use of third party implementers in the article assumes that without implementers these tools can be seamlessly implemented – a false assumption. It is the underlying architecture and elderly and enterprise centric design of these applications that are the issue – you are not buying a product but an expensive ‘kit’. A kit that is you deviate from its narrow and hard coded approach can be very expensive.

What Technology One offers is no different to what SAP and Oracle offer from an underlying architecture perspective – they are just competing on a price point. Doing your own implementation or having a skilled third party is not really that relevant.

As regards Oracle’s acquisition acquiring the rights to Java makes sense if a substantial percentage of your applications are written in Java. Also it helps keep revenue growth going.

There is a lot of confusion in terms of meanings. Firstly, Salesforce.com is not a single install ‘point solution’. That is not its design philosophy. It has been designed to be multi tenanted and Web resident so that hundreds of companies and thousands of users can use the same secure infrastructure which results in rapid implementation and a low cost to use. Many small companies and even larger companies do not want to install software behind their firewall (complexity, small IT team, not core to their business, etc). Open Source Web based ERP’s are in the ‘cloud’ and distributed as a Web service – see Compiere. Secondly, the cloud concept will only take off when we build a new generation of applications – essentially change the application development eco-system. At that point solutions like Technology One will be toast.

What organisations want is ‘SaaS’, ‘Cloud’, whatever you call it inside their firewall as well as being able to pull through external Web services and collaborate effectively. The current generation of technologies prevents this model (including Technology One) and has resulted in a costly and hard to maintain IT environment that is hard to synchronise with the business – most companies consume their IT budgets to simply keep this house of cards working.

The reference to Apple is a good one – it demonstrates the value of the end user experience and ease of use – you can have good technology but if the overall experience is bad then the product will fail. The issue with software applications is that we need to remove/eliminate the human from the process of application construction and build a new generation of person centric real time Web resident applications – this can be done today via a ‘factory’ approach so maybe the entrenched and monolithic ERP will cease to be the key enterprise system as we move to an ‘extended enterprise’ and collaborative world. This could happen very rapidly.

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