Over the last few years, Oracle has acquired several hundred cloud customers in India, all using different Oracle Cloud solutions...
Over the last few years, Oracle has acquired several hundred cloud customers in India, all using different Oracle Cloud solutions. “We are witnessing unprecedented demand for our cloud solutions in the country,” says Shawn Price, senior vice-president at Oracle, reporting directly to co-CEO Mark Hurd. As leader of the Oracle Cloud Go-to-Market and Product Business Groups (including technology, applications, and hardware), Shawn is responsible for driving the growth of Oracle Cloud’s portfolio of integrated services across the world. On a recent visit, he shared with Sudhir Chowdhary insights on where the cloud industry is moving, its adoption and what to expect in the future. Excerpts:
How is Oracle performing in India with regard to its cloud business?
We do not break out regional numbers specifically but if you look top line, we announced in Q3 that we are a $2 billion business. We have almost 1,000 ERP customers. Close to 70 of our SaaS customers were net new, so it is not just the installed base, it is not SMB—we are announcing companies that are global multinationals. We see demand in every segment of every market whether it is moving a single database unit of work, whether it is a consuming compute and storage or whether it is going end-to-end recruit to retire for HCM or marketing cloud or SFA. So really every single industry sector is untouched.
Who is adopting the cloud solutions in India—large enterprises, SMBs, or a mix of the two?
I think there really are three market segments. There is a transformational company that says, I am a global multinational and I am going to not only consume cloud for a particular function or to move units of work, but I am going to actually go end-to-end and there are many of those companies. But the biggest part of the market are enterprise customers. If you look at our Q2 earnings announcement, 30% of our Q2 customers bought multiple clouds. What that means is that they may have started with marketing cloud and then bought our SFA for business-to-business and then our e-commerce front end for business to consumer and then service cloud to both pre and post sales and they end up buying multiple clouds. We are seeing three segments of the market and then at the bottom end of that pyramid is the SMB volume business and that is moving very quickly as well. So three distinct segments, all expressing demand.
What is your perspective on the Indian market; government seems to be in an overdrive to adopt technology with its Digital India and
I think that with the Digital India initiative the Indian Prime Minister Narendra Modi is really leading in many contexts the world about universal access to infrastructure for citizens, about distribution of digital services into villages through mobile and if you look at what sort of leading edge of those services are, it is things like getting constituents out of line to online or mobile. It is about a digital portfolio or experience of who you are and your entitlement to services, things like a mobile bank that allows me to deposit.
So first and foremost, India at a macro level with the initiatives around digital are really interesting to Oracle. Secondly, India is pretty unique and today, I really believe that not only can India lead the region, I believe it has a potential to lead the world in many regards.
If you look at, there is really three things that are aligned. One is the mobile footprint in India with more than 200 million subscribers and 100 million socially connected and if you think about the consumption of SaaS, a lot of it is social that is the first place you look all connected. The second part is e-commerce. If you look at Flipkart and you look at the fact that almost 14% of all Indians transacted electronically via the web last month alone, you have two of the foundational elements for shift to digital.
Then the third is what is driving the shift is really things like inorganic growth or operating model shifts. India is not just a domestic market because of the IT service infrastructure; the fingerprints and influence of India goes global and the M&A activity in India across 18,000 cross-border acquisitions is forcing a shift to the cloud. So I think that India has enormous potential, we are starting to see that and we are investing. We are having 1,000 headcount, more than 350 to India alone this year in cloud.
How is India different from other emerging markets?
I do not think that India is an emerging market. We are seeing increasing demand for cloud because companies are getting disrupted by global competitors. Over the last few years, Oracle has acquired several hundred cloud customers in India, all using different Oracle Cloud solutions.
What is the outlook for cloud business in general and the Oracle cloud business in particular in India this year?
We expect to be the number one in cloud business this fiscal year. In fiscal Q3 2015, Oracle’s SaaS and PaaS grew by 30% to $375 million while IaaS revenue was $155 million, up by 32%. SaaS, PaaS, and IaaS revenues totaled more than $1 billion in half a year, with a run rate of more than $2 billion per year.
Oracle has a portfolio of more than 600 cloud applications, as well as thousands of packaged applications built by partners to further extend them. Oracle Cloud supports 62 million users and 23 billion transactions each day. It runs on 30,000 devices and 400 petabytes of storage in 19 data centres around the world.
So I am very bullish on India.