The government’s smart cities and Digital India initiatives have gathered maximum attention from the IT sector as these projects will rely heavily on information and communications technology. John Fowler, who is executive vice-president of Systems at business software firm Oracle, believes that some of the activities like Digital India initiative are going to drive infrastructure changes. “People will want to
look at using new hardware and software to build a secure infrastructure for Digital India and that is where we want to try to help as we build very complete hardware and software solutions that work in very highly scaled and highly secure environment,” he tells Sudhir Chowdhary in a recent interaction. Excerpts:
What is your perspective on the Indian market. Government has announced major plans to adopt technology with its Digital India and other e-governance initiatives.
The reason I am here is because I have detected a very big pickup and energy out of India and it is not just the government initiatives, it is also what you are doing in banking, energy and telecommunications sectors. Some of the activities like Digital India initiative are going to drive infrastructure changes. So people will want to look at using new hardware and software to build a secure infrastructure for Digital India and that is where we want to try to help as we build very complete hardware and software solutions that work in very highly scaled and highly secure environment.
The government is really opening up and allowing for free market competition, particularly in the banking and telecommunications sectors where there is a significant business opportunity. You have a technically astute society. So people who appreciate technology both the end consumer but also the CIOs and IT people are very technical here, that works well for me because I come along with a technical proposition.
So I am very excited about India. I think there is a lot of stuff that we can do here. Some of the things that we are already working on could
end up being leading edge examples for things that we do in other countries, so it is a big opportunity for us. We hope to be well-positioned with the transformation and help make it as successful as possible.
How could Oracle partner with the government in its Digital India initiative?
Well, we can obviously work on very complete hardware and software solutions. In fact, we just work with an entire country in Europe to create the complete digital transformation of all of their land records. Their entire land record system was in paper and we provided them the complete hardware and software solution because we have the software for document management, databases and reading systems. So they are doing a complete transformation from paper to that.
We have a lot of experience whether it is in public sector, education sector or it is in military sector; we have products that fit in all of these. Where we are unique compared to anyone else in industry is we can sit down and talk about the complete solution. So if they have a particular end goal which requires a set of software and hardware and certain performance and cost, we are able to propose a solution either it is based entirely on Oracle technology or it is based on Oracle technology plus partners that allow them to achieve their end goal.
How has Oracle’s hardware business been faring?
We have been doing much better. In the most recent quarter we reported hardware growth of 5%, which is significant given that the overall hardware market place has been generally flat to down. What has been driving that is Larry Ellison’s focus on R&D and R&D investment. We have innovated the chip level, the operating system level, the storage and the applications and so, we are doing this for providing some very interesting products to customers.
One of the main product areas is what we call engineered systems; that is the fancy marketing name but the basic idea there is in collaboration with the software teams at Oracle, we work on producing a solution together but it is not a packaging exercise. We are actually doing an investment in core R&D to make things like the database run better and more reliable to gain more security and other things. So those investments are starting to add up in the numbers which is people are no longer looking at us as a generic provider of hardware. They are looking at us as a differentiated provider of hardware.
What role do engineered systems play in strengthening your position in the industry?
Engineered systems have been a consistent element of growth over the past couple of years. They have now achieved a bigger and bigger run rate. We have shipped over 10,000 of them worldwide. It has become a very significant thing but what they do for us is they allow me to come into a customer and have a much stronger conversation. I can help the customer save significant amounts of money because I give them something that offers them more efficient engineered computing. I also allow them to tackle very large business problems. It took us a while to
convince people of the benefits that engineered systems offer, but now it has got momentum and we just expect that momentum to continue for some time.
Oracle is continually compared with IBM for its hardware business…
Our hardware business in the most recent quarter grew 5% and IBM’s hardware business shrank 23%. In the head to head battle, we have been continually gaining market share against IBM and the reason for that is very straightforward. What we have now against IBM is a more differentiated set of offerings. If you want to build your own on-premises cloud or you want to run a dedicated application, we provide a better solution than IBM does. So IBM is still showing up with very traditional solutions that do not include engineered systems and they do not have software well-integrated into their solutions. We are continuing to innovate in a very strong path against IBM in hardware and I see that around the world, people are looking at us as an alternative and often picking us.
What are the trends that are driving growth of the hardware industry?
Well, hardware industry overall has not been growing. The biggest trends that you are seeing in the industry are the growth of integrated engineered systems. So if you look at us as well as Cisco and others, the industry trend is towards more integrated systems. Our differentiation is that we also design the software part of integrated systems and that is what we are doing in products like Exadata and SuperCluster and so on. So in our case, we provide even more simple solutions to the consumers but that is the general trend that you see motivating people today in hardware. They are thinking about how can I simplify or make my information more secure and more performing using something like engineered systems or how do I want to use a cloud whether it is inside my walls or outside my walls. Those are the biggest drivers of hardware today.