IDC rates Oracle tops in outsourcing

IT research group International Data Corporation (IDC) has rated Oracle`s enterprise outsourced application offerings, such as those recently announced in SA, the leading services in their field.

In its examination of the market for enterprise application service provision and leading vendor performance for 2002 through 2006, IDC puts Oracle Outsourcing ahead of IBM, SAP and PeopleSoft in terms of both its ability to gain market share and to meet current market demands.

Among the company`s strengths, according to IDC, are management`s commitment to outsourcing and the company`s focus on delivering its ERP, CRM, business intelligence and supply chain management as outsourced online services.

"This rating is confirmed by our growth in outsourcing markets both locally and globally," says Joe Heunes, director of Support Services, Oracle SA.

"In SA, where we have only recently started to drive our outsourcing offerings, we already have more than 50 instances where we provide outsourced services."

Currently SA has four online DBA customers: Absa Bank, Billiton, Natref and South African Certification Authority. Its six online APPS customers are Absa Bank, Metrobus, Namitech, Unisa, M-Web and National Health Laboratory Services.

Globally, Oracle has grown from a base of 100 outsourced customers in 2001 to more than 500 today. Between March and May this year alone, Oracle acquired more than 100 new customers for its outsourcing business.

While in SA, Oracle Outsourcing has provided on-site managed services - @Customer - for some time. It sees its newly introduced enterprise software delivery model moving increasingly to an online environment.

"Communication cost constraints in SA have limited our ability to offer the Oracle E-Business Suite of applications, but we believe with the future expected reduction of communication costs we will see substantial growth in our @Oracle outsource service in the year ahead," he adds.

IDC comments that a success factor in the delivery of enterprise applications as a service in 2002 and beyond is a "focus on providing incentives to an existing software installed base to upgrade to an outsourced model", thereby circumventing the current challenges associated with a comparatively low demand for new enterprise applications.

"We`re obviously building on our extensive installed base in SA by coming to market with a value proposition which we believe is very attractive to both existing and new customers. This will give us the economies of scale that will make our outsourced offerings very attractive," says Heunes.

Such cost-effectiveness would be in addition to other benefits reported by Oracle users globally. Customers outsourcing software management report savings of up to 50% in IT administration costs. In addition, they say they can resolve product support issues 50% faster and are increasing employee productivity 35% or more.

The company`s fixed pricing policy is also said to be an attractive proposition. It is based on providing all or any part of its enterprise application portfolio on the basis of full outsourcing only and a single deal with no special clauses.

The company is backing up its full outsourcing offering with a guarantee that if a customer is not satisfied with the full outsourcing offering during a given month, he will receive a 20% credit of that month`s management fee.

"Such penalty guarantees are an indication of the confidence we have in our model," adds Heunes.