Oracle on 'build and buy` binge

By Warwick Ashford, ITWeb London correspondent

Johannesburg, 06 Feb 2006

Oracle last week concluded its bid for Siebel Systems, adding the customer relationship management (CRM) software company to its string of acquisitions in the past 12 months.

Oracle president Charles Phillips says the strategy of "build and buy" is set to continue.

"We`ll be doing more acquisitions, but they are likely to be relatively small because there are few large companies left to buy," Phillips told journalists in Cape Town on Saturday.

"Acquisition has been helpful to our strategy; it`s generating growth and producing returns. If you look at the past 12 months our profit is up 26%, so we are getting pretty good at it," he said.

Phillips was in SA to attend the opening of Parliament at the invitation of president Thabo Mbeki and was set to follow meetings with several government ministers on Friday with further meetings with high-level representatives of companies in the private sector.

Asked about the local implications of the latest acquisition, Phillips said the Oracle and Siebel operations would be consolidated in all countries including SA and that job cuts were unlikely.

"We need the Siebel people more, relative to other acquisitions," he said, pointing out that CRM was an important new area for Oracle and there was no overlap with existing operations or skills.

Empowerment requires skills

Turning to other local issues, Phillips said black economic empowerment in the local ICT sector was "much further along" than he had expected in 12 years. He noted that while both the South African government and business were already convinced that technology was the best way of improving efficiency, there was still a huge shortage of important technical skills.

"The best way to empower people is to give them skills to build their own careers and businesses," said Phillips.

He added that training and business development would be an important focus area in terms of local investment for Oracle. He said SA needed companies like Oracle to be actively involved in transferring skills to address the problem of "scarce skills" mentioned by Mbeki in his state of the nation address last week.

Referring to the various education programmes Oracle runs in SA, Phillips said such programmes were important to the company from a social responsibility point of view. "I wanted to come here personally and learn more," he said.

According to Phillips, the advantages of SA`s climate, cost of living, time zone and the English language mean that by developing the skill set in IT, SA could be much like India, China and other countries that are attracting business from around the world.

"It would be great to see that transition take place, but the necessary skill sets and obviously some infrastructure are the things that are missing."