The SMB market is the honey pot for every technology vendor. From a geographical viewpoint, a large number of SMB companies are based out of tier-2 and tier-3 cities. This means that technology vendors need to extend their reach into these markets. This was traditionally done using channel partners, but increasingly vendors are establishing direct presence in these cities to foster closer relationships with customers.
At Oracle, geo expansion is a strategic element of business growth. In 2013-14, Oracle established full-fledged offices, not sales outposts, in cities such as Pune, Ahmedabad, Chennai, Hyderabad, and Kolkata. The company has now taken up Chandigarh, Lucknow, Jaipur, Kochi, and Bhopal in the second phase of geo expansion.
These offices are meant to provide services and support to customers in the surrounding region and it goes beyond having sales teams in these locations. Says Yatin Kantak, Vice President- Geo Expansion Program, Oracle,” To do this, we have to be careful and serious, because it involves setting up the whole engine, which includes sales, technical, support, and people. Branch directors have to be completely empowered to make decisions.”
SMB Customer Dynamics
While there is no standard definition of SMB, Oracle sees market opportunity in 80 percent of the companies in the Rs. 10 crore to Rs. 1000 crore band of annual revenue. Yatin feels that from a demand standpoint, customers in such locations look for affordable solutions, but may require help from highly skilled technical teams. Cloud fits in very well in such cases, both from an infrastructure as well as applications standpoint. Especially, for new technologies like cloud, mobility, analytics, and others, SMB customers need much more handholding from the vendor. Says Yatin, “SMBS have the potential of embracing new technologies, but they need handholding to understand the business impact of these technologies. Though our partners are trained in doing that, our direct presence definitely helps in creating better confidence in customers.”
SMB customers have specific needs that determine the kind of solutions that are best suited. Explains Yatin, “When a customer seeks to know how much money can be saved, it could mean that he is looking at optimizing on-premise infrastructure and adding cloud services to the mix. If it is on-premise, then there may be the case for looking engineered systems. Similarly, if he is looking at consolidation and saving on data center space, there are options available.” When you extend this to applications, there are so many to choose from. The basic point is that technology buying for SMBs is no longer about buying standard components of the IT stack, but it about choosing the right architecture.
Oracle’s Cloud Play
Over the last few years, Oracle has acquired several hundred cloud customers in India, all using different Oracle Cloud solutions. Oracle’s Software as a Service (SaaS) business has seen the highest and fastest adoption rate till date, with Platform as a Service (Paas) close behind. Nearly 50 percent of its SaaS customers are net new. This can be attributed to the company’s best-of-breed SaaS applications which are integrated with social, mobile, and analytic capabilities to help companies deliver the experiences they expect, the talent to succeed, and the performance the market demands.
The Oracle Customer Experience Cloud(Oracle CX Cloud), which includes Oracle Sales Cloud, Oracle Service Cloud, Oracle Marketing Cloud, and Oracle Social Cloud, had the highest uptake in customer adoption and accounts for more than 50 percent of the company’s SaaS customer base.
Oracle Human Capital Management Cloud (Oracle HCM Cloud) customers constituted 32 percent of the SaaS customer base, while the remaining included customers using ERP in the cloud or PaaS, among others. Some of Oracle’s cloud customers include Birlasoft Limited, iGate Global Solutions, Indiabulls, Kotak Life Insurance, Pearson India, PolicyBazaar.com, PVR Cinemas Ltd., Reliance Commercial Finance, Thomas Cook India Ltd. among others.