In a bid to capitalise on the SME market and to strengthen its position in the new EU member states, the Oracle Corporation is implementing a new strategy for Malta. DAVID LINDSAY speaks to Malta’s Oracle Business Development Manager Kevin Attard
Oracle Corporation is perhaps best known for its database and enterprise resource planning solutions, serving the world’s top companies. Most would have seen the television advert stating that 98 of the Fortune 100 companies are running on Oracle software.
Oracle has set itself a footprint in Malta as well, having a number of major clients running mission critical systems on its software.
Oracle today, however, is distancing itself from this somewhat elitist image and is actively embracing the small to medium sized enterprise market, offering the full functionality of the packages used by the world’s biggest companies at a fraction of the cost.
While the targeting of SMEs is fundamental to Oracle’s strategy for Malta, the corporation also intends to develop Malta’s human resources through the university, and colleges, expanding its reach through assisting the government to help it achieve the ICT strategic goals it has set for the country.
As part of this strategy, Oracle has appointed Kevin Attard as its first Business Development Manager for Malta. But, as he explains, the strategy for Malta forms part of a wider strategy that sees the company capitalising on opportunities in the growing economies of the 10 new EU member states.
He explains, “In addition to the top notch customers in Malta, we are also targeting SMEs, which represent the economy’s backbone - not just in Malta but across the whole of Europe. The importance of the sector is reinforced by the fact that many of the top companies rely on SMEs as they represent important links in the supply chain.
“Given the role SMEs play in the value chain process, they simply cannot be left out of the technological sphere, in that large companies need to have SMEs in their supply chain that are capable of expanding their enterprise to communicate electronically.”
In fact, Oracle’s strategic plan for the whole of Europe for the coming years is to address this important SME market, most especially in the new EU accession countries of eastern and central Europe.
Mr Attard elaborates, “The countries of western Europe are very well developed and our strategy there is to consolidate what we have accomplished and to continue upgrading on the systems being used in these countries. The strategy for the new EU member states, on the other hand, is more a question of re-engineering, or removing what they have and building new systems from scratch.
“As part of this process, there is a lot of EU funding going toward the developing countries of Europe and there is a great synergy between the development of business and technology in these countries. As the economies develop, ICT forms an increasingly larger part of the economies in these countries, as has been the case in Malta.
“Oracle is now investing directly in the enlarged EU, as opposed to being represented solely by third parties. We feel that we now need to invest further in these countries, including Malta, and to establish a direct presence.”
But a direct representation does not, by any means, exclude Oracle working with partners as it always has, as Mr Attard explains, “Obviously we are still going to work with partners. In fact, our sales channel, around the world, is mostly done through partners and we sell very little directly.
“Oracle recognises the importance of local partners. Our partners around the world know their local markets, the politics, the economies and the people inside out and as such they are in a position to develop a 360 degree solution for the customer.
“We are working to expand the number of partners we have in Malta and in the coming days we should have an announcement of another large software company having been granted distributorship of Oracle in Malta. Earning a distributorship involves a lot of work since we cannot afford to have partners that are not well regarded and that do not have a strong business plan in place for every year of their partnership with Oracle. A long term partnership with Oracle cannot be taken for granted and all Oracle partners have to deliver according to the business plan. High standards are very important to us, which means having internal personnel trained on Oracle technology and business systems.
“I have had this role since 1 September this year. Oracle is investing locally in the same manner as they are doing in the other enlargement countries – employing local people and believing in them, very much the same as what we are doing in our partner expansion strategy. Again, this is because they have, within their country’s market, a cultural and technological fit. Oracle views these aspects as strategic advantages in themselves.
“Oracle has rolled out this strategy in Malta not merely because they have done the same in other countries. Not just for the sake of having another Oracle country office along with the offices they have in 110 countries and employing engaging another person in addition to the other 40,000 people on the payroll.
“Oracle is now viewing Malta as a strategic ICT player in the enlarged Europe. As has been widely publicised, there is a commitment from the EU that it wants to place Europe as the number one global player in the ICT field in the coming six years. The Maltese government’s commitment over the next six years, meanwhile, is for Malta to be the number one ICT country in Europe.”
The goal may appear to be a lofty one but, as Mr Attard points out, it is achievable thanks to the strength of Malta’s human resources in the sector. With the country investing in these precious human resources, a large number of technical people are graduating with very high skill levels, with which they can compete on the wider European level.
“In this sphere, there is a healthy synergy between the government’s ICT strategy for the country and Oracle’s ICT strategy for Europe. That’s why we view this office, although it’s very small at the moment, in a very strategic way - not just as servicing our client base, but also to work in parallel with government and to help it achieve the goals it has set for the country. If Malta achieves its goals, then Oracle would be achieving its goals as well. It’s very much a win-win situation.”
Mr Attard was somewhat reticent to reveal the contents of any ongoing discussions with the government.
“We have great confidence that government’s goals will be achieved, and believe the Investments and IT Ministry is doing an excellent job – it’s focused and it’s delivering. Since we see this strong commitment from the government, our commitment is coming in as well, at the universities and the colleges, to ensure that people are trained on the top notch applications and technologies Oracle offers.”
Top on Oracle’s agenda is to ensure its current customer base in Malta is a satisfied customer, while the fact that companies in Malta can now speak to Oracle directly is also a great advantage.
“I must say that I have visited a lot of companies using Oracle and I’ve had very positive comments on the service they have been given from the local partners. With the strategies we have now for Malta, I believe there will be even more satisfied customers. An important element of that is the fact that the investment ministry is successfully attracting a lot of foreign direct investment, in the pharmaceutical sector for example. A lot of these businesses, since they are international companies, are already using Oracle technology and having an Oracle presence in Malta is critical as this gives them the piece of mind in that when investing in Malta they will have Oracle servicing them directly. Finding Oracle in Malta is very important to them since the direct relationship they had with Oracle in other countries will be available to them in Malta as well.
“There is a lot of strategy behind our investment. What we are doing is reinforcing what we currently have and to expand our partner base on various tracks including distributorship, software development and education.”
Turning back to Oracle’s emphasis on SMEs, Mr Attard explains that, contrary to popular local perception, on a global level 70 per cent of Oracle’s customer base is derived from the SME market.
He elaborates, “Today we have the Oracle database for SMEs which is identical, in terms of functionality, to that used by the top 98 Fortune companies running on Oracle. This means that as SMEs businesses are scaled up, their software can be scaled up in parallel.
“The product is aimed specifically for the SME’s pockets and today the database for SMEs is sold at under USD150 per user, a price which competes very well with any close competitor of ours.”
Another advantage of Oracle is that it does not restrict users to any one platform, meaning that an Oracle database can be run on any operating system, not requiring users to use certain hardware and operating systems. “Oracle can be run on Windows, Linux, Unix, and on any hardware platform you choose to opt for, so if you have a preference for a particular flavour in your IT infrastructure, we can accommodate that.
“Oracle’s scalability is also important. If you grow or reduce in any direction, you can also increase or decrease Oracle’s infrastructure. A company may also opt for an ASP model – an application hosted at an IT service provider.
“Also, when it comes to traditional financial applications, we don’t offer just a financial suite, we offer an entire integrated enterprise resource planning system, or ERP.
“This is crucial because a lot of players offer just an accounting package but when it comes down to crucial subsystems such as inventory management, logistics, sales and distribution, manufacturing, and import and export, and Customer Relationship Management (CRM), companies have to go to other players to find other systems and then try to integrate them into their current systems.
“The Oracle advantage in this sense is that it is one integrated system. What we have done for the SMEs is we have tailored a package specifically for them through which they get all the functionality of an ERP system – a total, integrated enterprise system where you have all the functionalities required to run your business. Not just accounts, but all the mission critical applications that surround the business processes – sales ordering, distribution, customer relationship management, accounting, distribution and manufacturing. All this has been developed purely for the SMEs and is priced within their reach.
“So whereas in the past it was claimed that Oracle’s e-business suite was for the top notch customer employing over 2,000 employees, we now have systems starting from a ten user department, which means an SME would be running a state of the art system that has the best business practice integrated into it.
“A fundamental advantage of the system is that if a company should need to integrate its business into the supply chain of larger companies, such as the case in winning supply contracts, these types of big fish ask suppliers to integrate into their system.
“What we used to call EDI – electronic data interchange – is today known simply business to business – B2B. E-business is not just merely about having a portal on the Internet through which you sell your products, that is a false statement. E-business today is also about Business to Business linking, which has become very important for exporters and importers who are expanding their businesses through the supply chain.”
But while the frequently cited technical benefits Oracle brings to its client base easily run far beyond our scope here, perhaps even more crucial to today’s SMEs is the underlying philosophy at Oracle – that technology is not the be all and end all of its products.
Oracle, instead, views IT as an enabling tool to support the business. IT has to be there to support the business and the exploration of any venture toward which the business is trying to move.
As Mr Attard succinctly puts it, “Our solutions are based on best business practices, coupled with best IT practices. No one invests in IT just to have state of the art technology, businesses have to invest in IT because IT is there, at the end of the day, to support the business. IT is an enabler.”