Oracle, SAP set to decline: Technology One chairman

Australian ERP vendor says cost of big firms' offerings is alienating customers

The business model used by Oracle and SAP is fundamentally flawed and will lead to their downfall within the next decade, says Technology One chairman Adrian Di Marco.

Speaking exclusively with ComputerworldAustralia, in a wide-ranging interview Di Marco said that the fact that SAP and Oracle use third party implementers has lead to growing customer dissatisfaction.

"Oracle and SAP are expensive, and the question is whether they are delivering value for money," Di Marco said. Technology One competes with Oracle and SAP for mid-range businesses, educational institutions and municipalities that turn over between $250 million and $2 billion.

Di Marco says his company has a competitive advantage because it does its own implementation. "People are replacing Oracle and SAP in our target market with our new generation Connected Intelligence product," he said. "It's a vindication of our strategy of developing in Australia, doing our own R&D and doing our own implementations." In commentary accompanying the release of Technology One's half-year results to March 31, Di Marco noted "in the last six months, we've won five major deals where customers have moved to Technology One from solutions provided by Oracle and SAP". He also noted that Technology One is making inroads into the UK market, saying "we're making significant headway in the UK, where we have now beaten our major competitor on five consecutive deals. "We've signed a number of new high profile contracts in the first half, including University of Hertfordshire and Scarborough Borough Council". Speaking to Computerworld Australia, Di Marco also called into question Oracle's, and to a lesser extent, SAP's acquisition strategies. "Buying Sun just doesn't make any sense at all," he said, of Oracle's recent decision to acquire the iconic Silicon Valley brand.

He also called into question the viability of cloud computing in the enterprise space, saying that it was at least a decade away. "It's a point solution — like Salesforce.com — as opposed to an enterprise solution," he said. "There is a minefield of issues for enterprise, such as where the data is, the security and protection aspects of the data in the cloud. "We simply aren't seeing it as a big thing."

Where it will make inroads, he said, is with early-stage companies that are geographically dispersed and agile. In fact, it's these agile companies, he said, that will come along and out-innovate the incumbent players. Technology is a process of renewal, and the incumbents aren't always willing, or able to take advantage of new technologies or new ideas, he said.

He points to the iPhone as an example; it took a company from outside the telecommunications space to show the big players — Samsung, Nokia and Motorola — that a phone was essentially a software-based device. "And the thing is that something like the iPhone could have been done in Australia," he said. "I firmly believe it."

That's because Australia has outstanding R&D and great educational institutions and Australians have to learn how to do things on a budget, he said.

"The problem is that we don't build enough IP [intellectual property] in Australia. We're still stuck in that mentality of digging things out of the ground. The NBN is the one exception to this, and even that is aimed at old industries rather than encouraging new ones," he said. Technology One customers in New Zealand include the Far North District Council,

Waiariki Institute of Technology, Queenstown Lakes District Council and Department of Building and Housing. - Additional reporting by David Watson

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Tags managementOracleSAPtechnology one

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