Inside Oracle's Plans to Conquer the SMB Applications Market

Oracle's Accelerate program for small and medium-sized organizations relies on Oracle partners and industry-specific application sets. And the key, says Oracle's Tony Kender, is faster, easier and cheaper implementations for smaller organizations.

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Oracle
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Forrester Research
Mon, June 09, 2008CIO Oracle has made no secret of its plans to "focus on the midsize applications space," as Tony Kender, the senior vice president of Oracle's global Accelerate program office, puts it. Like its rival SAP, Oracle wants to broaden its appeal to mid-market decision-makers looking to invest in IT.

While accurate, the word "focus" just doesn't seem to adequately capture the aggressive and competitive spirit that Oracle is best known for. In the case of the SMB opportunity, however, Oracle's actions and go-to-market strategies have, so far, spoken louder than any of its executives' words.

Since 2007, Oracle has introduced a multi-faceted SMB strategy, called Accelerate, that could help it gain sizeable shares of the vast midsize and small-company market. (For more on competitor SAP's SMB strategy, see "SAP Pays Partners, Goes with Gusto for SMB Customers.")

Oracle's core message to SMBs is simple: faster, easier, cheaper. "In the big scheme, Accelerate is the overall program to bring more SMBs into the market," says Ray Wang, a principal analyst at Forrester Research. "Accelerate has many components that include favorable SMB pricing, rapid implementation methodologies, partner ecosystems and targeted [marketing] campaigns."

Most notably, Oracle has made the guts of the enterprise applications for which it is best known—E-Business, Siebel, PeopleSoft and JD Edwards—also available to its SMB customers, something Kender passionately claims the competition does not readily do. (Oracle defines its midsize and small application market as companies with less than $500 million in revenues; it claims 24,000 SMB business applications customers, which totals approximately two-thirds of its applications customer base.)

"Most software companies will say: I need to create this special 'small-business, watered-downed, less-functionality-so-that-it's-easier-for-you-to-acquire-implement-and-keep-your-costs-down software," Kender says. "'And don't worry, when you grow, you can just pull that out and buy another package that we have—you know, the Big Boy software. And then you'll pay a bigger price. But don't worry about the extra cost of re-implementation, because we have a special package for you because you're special."

Kender's sarcastic explanation might be a bit over the top and self-serving, but his point is valid: Why can't a midsize manufacturer use the same Big Boy software that GE uses? "In the past," Kender says, "there were serious barriers to doing that: the cost of large enterprise software, the way it was priced and the requirements to implement it made it too costly." (For more, see "Software Licensing and Pricing Is Still Too Complex and Costly.")


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