Trip Report: DownUnder

(Copyrighted 2007. Photo by R Wang. All rights reserved)

WHAT'S GOING ON DOWN UNDER FOR ENTERPRISE SOFTWARE?
Well, it's hard to beat the weather, scenery, and market in Australia and especially here in Sydney! Amidst this wonderful backdrop is an economic boom based on Financial Services, Public Sector, and Natural Resources, especially mining. In other economic news, real state pricing has hit a drop but not b/c of the US sub-prime scandal, but more along the retirement savings laws passed by the federal government which has moved a lot of money out of the real estate market. However, rents continue to rise while construction has halted.

(Copyrighted 2007. Photo by R Wang. All rights reserved)

On the technology front, there is a lot of activity supporting the 3 key industries. Enterprise apps remain hot as the country moves into the post-Y2K replacement cycle. In the context of globalization, as expected, China and India remain the talk of the country while the Aussie public sector heats up:

• China's economic influence runs deep for natural resources. China continues to be Australia's largest importer of natural resources such as copper, coal, bauxite, iron ore, and nickel to name a few. The market is such a buzz that there aren't enough truck drivers to haul loads to ports, even with salaries hitting A$ 80,000 a year and miners are clearing A$150,000 or more with bonus. (Side note: The guy that drives the train from Rio Tinto's mine to the port in West Australia makes A$150,000 per year!). From a tech perspective, apps spending is up in the mining and exploration sector to support China's large appetite for natural resources. This means heightened interest in software replacements, upgrades, and new purchases. ERP, supply chain and TMS support, and other mining specific applications are garnering significant interest.

• India's role continues in global delivery models for financial services. The continual labor arbitrage for services and back office functions drives the buzz with India. With most the Financial Services firms looking at these opportunities, the system integrators are playing out the global delivery models and many of the large multi-nationals are focused on business process outsourcing opportunities (BPO). From many conversations its clear that large scale ERP replacements are also on the way for Australian based financial service companies.
  

• Consortia and shared services provide opportunities for the public sector. On the public sector side, IT spending for new projects continue with shared services organizations continuing to lead the way. These public service consortia have been among the early adopters of BPO. Agencies such as water, building departments, land administration among others have done a great job, especially in the rural states like Western Australia.
  

BOTTOM LINE FOR END USERS
End users should begin the process of mapping business initiatives to software spending requirements. Business and IT projects should focus on 4 key drivers: growth, efficiency, regulatory compliance and strategy. One suggestion is to conduct a self-assessment of long term apps strategy readiness and to be focused on building a 5 -year apps strategy that includes organizational change, process optimization, technology readiness, and solutions centric ecosystem maturity.

BOTTOM LINE FOR TECHNOLOGY VENDORS
For system integrators this means a ripe market where implementation services, apps replacement and upgrades, and outsourcing provide significant opportunities as customers look at their technology requirements in the context of business initiatives


(The personal contents in this blog do not reflect the opinions, ideas, thoughts, points of view, and any other potential attribution of my current, past, or future employers.)
Copyrighted 2007 by R Wang. All rights reserved

Event Report: Oracle Open World APAC - Shanghai, China

(Copyrighted 2007. Photo by R Wang. All rights reserved)

ORACLE OPEN WORLD SHANGHAI DEMONSTRATES THE POWER OF THE ORACLE BRAND
As some of you know, I recently came back from Oracle's Open World Shanghai (July 30th to August 2nd). With 8,000 people at Oracle Open World, and about 1000 there for apps, you could really see the momentum taking off. Of the 60 partners, it was great to have been able to talk to about 25 partners in my broken Chinese.

Here are a few quick observations from the event:

• Oracle's presence in China for 18 years gives them a significant advantage. Initially based on the database successes, Oracle builds on solid networks and relationships required for sales success in China. During that time, Oracle has grown to more than 1500 employees, across 13 branch offices, and 16 representative offices throughout China. Customer counts number over 7,000 and the Oracle Technology Network (OTN) in China exceeds 245,000 members. In addition, Oracle works closely with over 800 partners.
  
• Attendees very interested in Fusion Middleware and applications. Conversations with attendees revealed significant interest among partners to gain certification for apps implementation. Customers expressed bullishness on Oracle's future as well as its acquisition strategy.
• Guo Wei, President of Digital China gave the most inspiring presentation. Despite the fact it was delivered in Mandarin and this poor analyst forgot to get the translator headset, Mr. Wei proved to be a visionary. His descriptions of the very fragmented Chinese customer and market showed a deep knowledge of where the future Chinese enterprise apps market. More importantly, he went into detail on the role of the software industry in promoting and reinforcing sustainable development and supporting China's future growth path.
  
• The Oracle brand remains larger than life. Throughout Asia, the media blesses the tech gods and assign a rock star status to the companies that symbolize progress and technological prowess. Respect for Oracle's brand remains high in China, allowing Oracle to attract top university graduates, key partners, and receive significant media coverage.
  

CONVERSATIONS WITH KEY EXECUTIVES SHOW EXTENSIVE COMMITMENT TO PARTNERS IN APAC
Necessity drives innovation in APAC. Oracle's partnership strategies provide the right balance of synergies in product development, go-to-market strategies, and ecosystem support needed to win. Conversations with Mark Gibbs, SVP for APAC app sales; and Bronwyn Hastings, APAC VP Channels and Alliance highlighted the following:

• Clear solution strategies forge tighter partnerships. Oracle's extensive whitespace maps for solutions and industries across geographies tremendously help partners identify opportunities for investment. They also provide insight as to what areas Oracle is willing to cooperate on versus acquire and build.
• Partners demonstrate significant partnership maturity. Partners compete directly and work cooperatively in delivering customer solutions. Many of Oracle's largest partners build their own packaged application software for the SMB market but resell Oracle and competitor software for the enterprise market. Partners like NeuSoft, Digital China, and Hand devote significant resources to Oracle. In fact, one Certified Advantage Partner, Hand focuses 700 people on 300 customers for Oracle EBS implementations.
  
• Technology focused partners provide future base of apps partners . Due to Oracle's heritage, most partners deliver on database and tools capabilities. However, this base will work to Oracle's advantage as the same skill sets for DB and Middleware translate well to enterprise applications. By harnessing this network, Oracle retains a significant advantage among competitors.
  

(The personal contents in this blog do not reflect the opinions, ideas, thoughts, points of view, and any other potential attribution of my current, past, or future employers.)
Copyrighted 2007 by R Wang. All rights reserved

An Interesting Thing Happened to Me on the Way Back From China ....

Just returned from a trip to China, obstensibly to visit friends and family, but the workaholic side of me couldn't help but arrange for a variety of conversations with businesses large and small doing business in China ... as well as the investors who fund them. I have to admit that came back both awed, as well as a bit disillusioned by what I can only describe in the word, "massive."

First, everyone is filled with the potential of China as THE booming market. You can't help but notice much of it in the lack of rules and constraints, whether in ...
(1) the hyper aggressiveness of startups quickly replicating and expanding on existing ideas ... an example is my conversation with Bill, the founder of KU6, a hot Draper funded "youtube+" that has brought together not only user generated content with shared ad revenue, but also user generated advertising.
(2) the continued drive of innovations in mobile in areas such as pervasive branded experiences ... for example MyClick
(3) whole new business models ... a key observation is that without incumbants defining business boundaries, companies actually have the ability to cross traditional market lines starting from a strong web-presence into things like ... amusement parks, retail, or media. Some would use this to justify some of the large pre-IPO valuations. Very exciting. Then again, a little too much like the height of Silicon Valley craziness, including the extreme sense of developer entitlements that was a hallmark of the bubble.

At the same time, to many around the world as well as a key driver of the economy, China is still about execution: IT Outsourcing, BPO, and cheap labor ... especially for Korea and Japan, for whom India cannot provide the Asian language skills. I had interesting conversations with BearingPoint regarding their evolving strategy ... and how it necessarily includes expanded use of the Global Development Centers. Interestingly, China, as validated by BearingPoint, struggles to support the rapid growth for Services due to (1) education system inadequacies and (2) a booming local economy ... something that India has less issue. A recent McKinsey study does a nice job outlining the looming shortage of manpower for service industries in both China and India. As mentioned above, the local market is expanding incredibly rapidly, whether in Internet, as well as consumer services, retail, entertainment, etc., competing for human capital.

All that in mind, there is something disturbingly hopeful about the rapid rise of the Internet to both entertain and ultimately, connect people in China. In a society where Internet entreprenuers openly speak of the fact that China has become a very lonely place - in many cases driven by government policy of single children households, breakup of the extended family unit, and forced movement to the cities and mass production, mass living, mass education ... resulting in a mass of lonely people looking to connect.