Oracle OpenWorld 2015 - Oracle’s pitch to the small manufacturer
- Summary:
- Oracle is endeavoring to attract the SMB manufacturer to the cloud. But they have to make pricing competitive.
Sutton Tools, a family owned cutting tool manufacturer based on the outskirts of Melbourne employs 400 staff. Steve Dowey, the company’s technology manager, gets by with an IT team of only three people which presents a number of problems in a market that increasingly puts demands on fast and accurate data being exchanged between its internal processes, distributors and the company’s online presence.
The company's disparate system involved lots of cutting and pasting (sic), a problem exacerbated with many of their quality assurance systems being paper based.
Because we have a very tiny IT team, we went on this hunt for suitable tools we could manage ourselves. We had all these tools then we hit on this Rapid Application Tool which was Oracle APEX. Where we started was a business process re-engineering project. Oracle fitted in because of APEX, as integration was the big part that we thought was missing. When we analyzed the situation, it was clear that we were missing process flow control.
Interestingly, Sutton Tools replaced their existing Sharepoint applications with an on-premise Oracle installation instead of moving to the cloud.
We’ve used web services to integrate between our systems and we haven’t had to use the cloud.
The cloud is what Prem Genesan, Sutton Tool’s account manager at Oracle, sees as being key to further penetration into the small to medium enterprise space, particularly in manufacturing.
There’s a lot of manufacturing organisations that we have been talking to about traditional on premise Oracle products but these have been expensive to consume. Cloud products are fairly affordable and are easy to use. Traditionally Oracle has been talking to the big banks and big businesses. With these new products it’s a level playing field as small and medium companies can use these platforms to compete in the marketplace.
Sutton Tools are still considering their future on the cloud along with their choice of ERP, given they’ve always considered Oracle too expensive.
My take
This story is good news for Oracle, assuming they manage to deliver the manufacturing suite by the end of 2015 as advertised. It is now picking up new businesses outside of its traditional large scale enterprise space. However the margins with such businesses are smaller than Oracle is used to getting.
If Oracle is to successfully maintain margins up with such customers, particularly given Larry Ellison’s declaration of competing with Amazon and Microsoft in the commodity market, it is going to have to offer compelling products across markets bigger than Australia’s tiny precision engineering sector. Even so, it's a start.
Disclosure: Oracle is a premier partner at time of writing. Oracle covered most of the author's travel costs for attending OpenWorld.