Oracle Puts Pressure On Microsoft - InformationWeek
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9/28/2004
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Oracle Puts Pressure On Microsoft

The vendor brings its E-Business Suite to North America to go against Microsoft's ERP software.

With the first phase of the high-profile PeopleSoft Inc. antitrust suit behind it, Oracle is stepping up efforts to take on Microsoft in the small and midsize database and applications market.

Oracle says it's pitting its E-Business Suite Special Edition--now available in North America--against Microsoft Business Solutions-Great Plains, an enterprise-resource-planning suite that's priced somewhat lower than comparable software.

Oracle says it will tap channel partners--approximately 2,800--to penetrate the small and midsize market in North America. E-Business Suite has already been a successful product line for Oracle in Europe and Asia-Pacific for nearly two years, Oracle president Charles Phillips said Monday.

The suite is a package of preconfigured business applications geared for smaller companies. "We can sit around and wait for things to happen there, or we can create new opportunities," Phillips said, adding that as Oracle adds more partners during the next year to serve this growing market it will take time to get all of them up to speed.

Oracle's move toward small and midsize businesses is being driven by a saturated software market at larger companies. Also, IT budgets at small and midsize companies are on the rise, in part because of a need to remain competitive. Today, small and midsize companies spend an average 6.3% of revenue on IT, compared with larger enterprises whose budgets are typically at 2% for manufacturers and 5% for services companies, according to AMR Research.

People have different definitions of the small and midsize market, but Phillips says it consists of companies that earn $250 million or less in revenue a year. These companies make up more than 40% of E-Business Suite customers, he says. AMR Research defines European small or midsize businesses generally as those that have 1,000 employees, compared with 2,500 in the United States.

Oracle isn't the only company paying more attention to the small and midsize market. Companies that have forged or notably strengthened efforts this year include Cisco Systems, Hewlett-Packard, and SAP.

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