Oracle Sees Vertical Industries As Keys To The Midmarket - InformationWeek

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2/8/2009
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Fredric Paul
Fredric Paul
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Oracle Sees Vertical Industries As Keys To The Midmarket

Oracle says midmarket companies need three things in their software solutions: 1) industry-specific approaches, 2) partners who know their industry, and 3) easy implementation.

Oracle says midmarket companies need three things in their software solutions: 1) industry-specific approaches, 2) partners who know their industry, and 3) easy implementation.These are the three key points that came up in a recent converstation with Tony Kender, senior vice president of Oracle's Global Accelerate Program Office, about how Oracle is addressing the midmarket - that too-often overlooked sector between small businesses and large enterprises.

DON'T MISS: What The Midmarket Wants -- According To Oracle

One reason the midmarket gets short shrift is that no one can agree on exactly what it comprises. Oracle calls companies with less than $500 million in annual revenue "midmarket," Kender says, while some competitors consider companies with up to $1.5 billion midmarket. (At bMighty, we use number of employees as the measuring, and top out the midmarket at 1000 - 1500.)

Given that definition, Kender says, two-thirds of Oracle's customers are in the midmarket. But up until a couple years ago, he acknowledges, they didn't get the attention they deserved. "Midmarket companies have the same requirements and complexity as large enterprises," Kender says. "What they don't have is the same resources."

Because midmarket companies can't afford the cost and don't have the resources to implement the complexity of enterprise software, most vendors water-down the functionality and complexity of their enterprise software. They then hope to migrate midmarket customers to "big boy software" as they grow. But Kender says that's not really a migration, it's a "big change" that can be very disruptive to a growing company.

Ironically, Oracle's new approach to the midmarket focuses on vertical industry, not company size. Initially, the pricing wasn't right, Kender explains, and the midmarket was not able to buy software in the ways they really wanted to, bundled by industry with the apps they needed. And it took midmarket companies too long implement Oracle solutions.

So Oracle changed its pricing and created industry-specific software bundles. The idea, Kender says, is to work with industry-specfic partners to deliver the same software that enterprises get. "We know 80% of what they need, and we let the partner go and put in the 20% that is specific" to a particular company's needs. Of course, that required an "ecosystem" of third-party companies and infrastructure" for key vertical markets -- including new add-on modules to address specific industries. That ecosystem has now grown to 230 solutions in 53 different markets.

Kender claims that with this approach, midmarket implementations can begin in 24 hours, and be completed in weeks instead of months.

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