Oracle eyes next wave of growth from Engineered Systems

Engineered Systems, the pre-integrated solution stacks of Oracle servers, storage, networking and software, lie at the heart of the company’s data center strategy. As per the Oracle’s Q3 2015 revenue figures, Engineered systems grew at 15% globally and more than 10,000 units have been shipped globally. Oracle is confident that  innovations in the Engineered systems portfolio will drive the next wave of growth for the company, and is ready to take on its competitors. We delve deeper in an interaction with Mitesh Agarwal, Group Head - Sales Consulting & CTO, Oracle India.

Group Head - Sales Consulting & CTO, Oracle India

How and where does X5 range of Engineered System figure in Oracle’s scheme of things?

The Engineered Systems journey started for Oracle globally in 2009when we launched our foray into hardware and the first generation Engineered System called the Exadata V1. An integrated Engineered solution like the Exadata really helps organizations because 80% to 90% of the hardware & software is pre-configured in it. We just customize basis business specific requirements of the customer and they have to  just plug in and the system is ready to go. We have very fixed price configurations and therefore there is very little R&D that the customer needs to do and minimal integration required.  They are able to get off the ground very quickly and this reduces the time to market fast.

Also from an Oracle business perspective, we would want to know how engineered systems is going to help the company in expanding its footprint in the datacenter space?

As per reports from independent analysts, we are by far the # 1 player in the integrated systems market. We have huge market share of about 50%. We created the category and continue to lead it. We have a three pronged strategy for engineered systems. If you really look at the country today, we have nearly 60% of the relational database market share. We may not have that kind of market share for example, for our storage business. This itself poses a huge opportunity for Oracle. Abd these are types of market opportunities where we are really striving to mark a gain.

The second part is replacing competition. Over 50% of new customers have replaced a competitor product with that of Oracle’s in the last year. We are witnessing a surge in demand from both public and private sector organizations. We have a bunch of customers across banking, manufacturing and across telecom, in government sector both at state and central levels. We have hundreds of machines deployed across the country. Secondly, we’re seeing growth from  customers who are  repeat buyers. It is a great testimony that customers are happy and they want to expand their Oracle footprint even further. There are customers who have bought X4 or X5 Exadata, today they upgrade the machines with X5 and enjoy the benefits of the latest generation chips as well.

Right and if we talk about value proposition for enterprise, enterprises today are looking at how to tackle the disruptive technology. How does engineered systems help do that?

It is a great point that you have made. If you look at what happens in the social media, you can never predict a traffic pattern, you can suddenly have some sort of news event that can trigger a huge amount of traffic on Twitter or Facebook or any of the social media sites. Similarly you could have, what we have in the country the billion dollar sale. Once an e-commerce provider announces it, then competitors also announce a similar promotion. These all are bursts of traffic. To give you an example, for one of the largest private sector bank in the country, most of their traffic comes from e-commerce sites. When Flipkart announced that the traffic shot up 500% higher on that day, as a bank,how do you take care of such kind of disruption, and  yet support the business. Engineered systems helps address that.

Also any specific sectors you are looking at?

The initial adoption was primarily high in banking, telecom and manufacturing. In the last two years, we have seen a surge in adoption from retail, manufacturing, textiles and government. We are witnessing a demand for private cloud set-ups. We have a lot of competitor technologies that run on Exadatas, for example, we have a bunch of SAP customers who run their SAP infrastructure on engineered systems.

Going ahead how important is engineered systems going to be in the Oracle’s datacentre plan and what will be Oracle’s specific strategy for growth in this space.

If you look at any of our earnings announcements, all of them speak about how engineered systems continues to grow. It’s one of the few products that even after five years is growing in double digits at a global level which is fantastic because at a global level if you can grow at that pace, then at the country level it tends to grow more. The number two is , we spend 5 plus billion dollars of R&D every year. A significant portion of that goes into making sure that engineered systems become even better performing, even more stable. So these are very clear and core strategies and we continue to do that from India as well. You would find that every quarter we add a number customers to the portfolio. The public reference ability of our customers has gone up by over 100% every quarter. So every single customer says hey I want to share this with the CIO community as to how I benefited from this. So that gives us great testimony and great satisfaction that our strategy with this product is working.