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–Nimish Mehta,
Senior VP, Industry Applications Division, Oracle Corp.
Nimish Mehta is responsible for
developing and marketing products for vertical markets like healthcare, telecom and
energy, and government. He is therefore, very closely aligned with the ERP workspace and
as such also part of Oracle's corporate strategy formulation and other such activities
like acquisitions and initiatives. He has been with Oracle for the last 10 years. Prior to
his present assignment, he was VP of the solutions business where he was responsible for
creating the Oracle PC-based product lines such as Oracle Workgoup7. Before Oracle, Mehta
was with AT&T and Octek. An IIT (Delhi) graduate, he has an MS from the University of
Toronto as well as an MBA degree from MIT. Mehta was in the capital recently for Oracle
Open World'97, when he spoke to DATAQUEST on wide ranging issues encompassing the ERP and
the database market. Excerpts:
What does it mean to be with
Oracle, especially with your company taking up so many contentious issues on so many
fronts all at once?
It is exciting and you get used to all this. There is a lot of burnout too, especially in
this cowboy kind of scenarios, but it is great work in spite of being intense. Oracle has
grown up and has been growing at tremendous rates since the time I joined. This is
something that has been integral to this company's philosophy-expand and consolidate.
But hasn't this been at the cost of
too much of a sensationalism?
That has its merits and demerits. We did take a loss sometime back and the stock fell and
everything crashed. That was in a way interesting for the company. We took in a lot of new
people and relooked at what we were best at. The thing is that we believe that we should
be in a strong competitive position in whatever we do rather that just being a side
player. Today, you can see that across the board, wherever we are we have a very strong
position. This is true of whatever market we are in.
Are you now dominant in all
segments of your operations?
See the database side of our business...we are the leaders there. In the tools area also,
every other tool vendor has virtually vanished. In the applications area, we have been a
good number two. The number one company, SAP, has been there but their growth has been-on
a quarter to quarter basis-about 50-55 percent. We have done more than 90 percent growth
for the same period. What is happening is that we are actually gaining share on our
competitors in all these areas; and that is a great time to be in and I am happy that
Oracle has done this in so consistent a manner.
You also have a strong presence in
the consulting market as an independent company...
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Yes. In fact, we are the fourth largest software consulting company in the world. We have
8,000 consultants all over the globe. We do things ranging from strategy consulting, which
is a very small part of the business, to implementation consulting. This last forms the
bulk of these people's work. We come in with our other partners like PriceWaterhouse, who
have their own consulting teams sometimes. So the choice is there for the client. However,
if you decide on Oracle databases and Oracle applications, then our people would be the
best equipped to handle that for obvious reasons.
In the applications business do you
also include engineering and consultancy revenues as part of your overall revenues from
this area?
That all depends on the nature of the contract. We work with a lot of partners and
solution vendors and we are "prime on the bid." This means that we would be
referred by these people and then we come in. Our involvement is whatever we are asked to
do and that involves the entire software space. We do not do any kind of business in
hardware and that is something that we leave to other partners.
Does that imply you do not always
have to integrate your consultancy services with the software that you sell to your
customers?
The way we operate is that when we sell a software, a package goes with it. Obviously that
may not happen always and so you may have others like Andersen Consulting or
PriceWaterhouse coming in with their consultancy solutions. There we stay in the periphery
but we are always there with our support. The most interesting part of this is that there
is not a single application software vendor today, to the best of my knowledge, which has
been there to provide or be even present when there has been a technology shift. We went
from the mainframe to client server, from client server to thin client. There is a lot
that is happening here and as you know from our effort in this space, we are doing quite
well here also. The reason that we have been able to survive is that we have looked at our
business in a way that is different from the other companies. Our heritage is not of
technology, our heritage is tools.
With a database solution as well as
an ERP package, do you come across accusations of monopolizing this space?
Take SAP as an example of an ERP vendor. Seventy percent of the time when people buy SAP,
they are buying Oracle anyway. And that is something that happens in other markets as
well. We are the leaders in the database market and since we are almost everywhere, we do
tend to become the de facto standard for the world. What our detractors are saying is that
there should be a choice. And there is. But if you are given 15 choices and you cannot
choose 14 out of those, what can you do. What I say is that the value you gain out of an
integrated solution on an Oracle database far outweighs the perceived advantages and
benefits of choice. Today if you were to choose a database, it would be right to say that
the least would pick up Sybase. Or Informix. It is not very clear that these companies
would be around in a few years. What happens is that you look at these companies and you
would probably pick Oracle. At least that is what the buying behavior in the marketplace
suggests.
And that is something that has been
happening as well, especially with these very companies now turning more aggressive than
ever before?
You look at the last four quarters. Seventy percent of all new investments in databases
went to Oracle. If you look at this figure then it means that almost all new investments,
not including maintenance upgrades as it is harder to move people from what they already
have, have gone to Oracle. There is clearly a huge shift to move to Oracle anyway. So
people are independently choosing us over others because we are the best.
That is what Bill Gates says about
his products too...
But people are not independently picking up Internet Explorer. Netscape has a larger
amount of share in that market than Microsoft. So what I am saying is that bundling is a
very different issue. We are not bundling anything. If we said that you buy Oracle
database and the application comes for free, then that is the correct analogy between
Microsoft and us. Had we said that then that would've been taking an unfair advantage over
SAP. What happens actually is that you are free to pick up Oracle database and take SAP.
Our customers are free to go where they want. What Microsoft is doing is using its
monopoly in the operating systems area to drive its additional product sales. Our analogy
would be to use our dominant position in the database market to drive application sales.
We are not doing that.
How about your often conflicting
and apparently overlapping partnerships-like with Digital which has an alliance with
Microsoft as well?
We believe that ultimately the people who matter are the customers. These clients are very
important for us. Even more important than our partners. This relationship with our
customers is something that we will not break up under any circumstance. I believe that
there is no such thing as a completely cooperative or a completely competitive
relationship. We do it with Microsoft. We have products that work on NT and we work
closely with the Windows NT team and yes, it makes us uncomfortable. We work closely with
other companies also, who may appear to be our competition. We expect SAP also to
cooperate with our database teams and compete with us in the applications area. I guess
that is the way of life.
Doesn't the fact that your close
partner Digital participated in Microsoft's Scalability Day demonstrations make you a bit
apprehensive about its stand with you?
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Not at all. In fact, if I were Digital I would do the same thing. It has a responsibility
to its shareholders to diversify as much as possible.
However, if push comes to shove,
what do you think will be the stand of your partners?
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Many things may happen. But remember that it is the customers and not the vendors who have
to take a stand. Our customers come to us and ask us what they should do. We recommend our
clients as to what hardware they should buy and what modem they should use. We give them
the agnostic path. Take HP, take Digital, take IBM. And they tell us, we know all this but
tell us really what we should buy. Digital is also playing the same game.
But there has to be some gain for
both partners to stick around in the face of adversity, so to speak?
Exactly. You have to understand what is the long-term gain that Digital has in partnering
with Oracle over partnering with Microsoft. What Microsoft may do is turn Digital into a
product company by virtue of its alliance with Intel. The question is that do you want to
get marginalized and with Microsoft that may be true. Frankly, I don't see the long-term
benefit for a hardware company to work with Microsoft.
Do you think there will be some
kind of a shake-out happening very soon in the ERP market?
There are reports that there will be just four companies that will be left in the ERP
space very soon. That should be good for the industry as a whole. I am not saying that two
is better than four. What I am saying is that from the side of the vendors also, this kind
of consolidation is also becoming inevitable. Just look at the kind of investments that
are being made by the top application vendors. It is just not possible for every one in
this space to match these investments. This is making new entry a little difficult and
ensuring that the end-user gets a fair deal in terms of return on investment.
And in terms of technology, what do
you think is going to be the next wave in the IT industry?
I think that managing a supply chain for a client and his clients and customers, and so
on, is going to be very important in the next few years.