Oracle plans to work with data center operators in Asia Pacific, rather than set up its own data centers in the region for its IT outsourcing services, according to a company executive.
"We think that one of the key elements of our strategy for providing our e-business outsourcing services in Asia Pacific is to partner with those who can provide the data center facilities," said Keith Budge [CQ], regional managing director for South Asia at Oracle. "In this model we will jointly provide the services to the customer, although the customer will contract separately with the data center operator and Oracle for the services."
The Redwood Shores, California, software vendor has three models for outsourcing customers' IT operations, which it calls At Customer, At Partner or At Oracle. The Oracle environment -- application software, database, or application server -- is managed by Oracle in all three models, but the customer has the option to have the software hosted by Oracle, or by an Oracle partner, or at his own premises.
"Setting up a data center on our own requires capital investment, and we need to weigh out whether we think that would be the right way forward in Asia Pacific or not," said Budge. "There are a number of companies in the region that have established (data center) facilities and capabilities, and we want to take advantage of that in terms of our capacity to take our service to our customers more quickly. Another benefit of partnering would be market reach, as some of these companies have existing customers that may be interested in our service."
As Asian customers do not have as much experience with facility outsourcing as do customers in North America, Oracle expects that most Asian customers will prefer to have the facility on their own premises. Oracle will then manage the Oracle software layer for them, according to Budge.
"Even in Japan, it is more likely to be At Customer like the rest of Asia," Budge said. Oracle's model for delivering e-business outsourcing services is to manage the customer's infrastructure remotely, rather than at the customer's site. " If we have to deliver it on site it is difficult to make it cost-effective," said Budge. "So it is more likely to be managed remotely, with people going on site only when required."
Oracle introduced its outsourcing services in Asia Pacific recently, and has about four customers in the region. "We very deliberately waited to introduce this service in Asia Pacific, until we felt the market was ready, and we were ready to provide this service effectively," said Burge. Oracle expects that about one-third of its new customers in Asia Pacific for its E-Business Suite will opt for outsourcing services along with the software, according to Budge. Some current customers of the E-Business Suite, who are upgrading to newer versions, are also expected to go in for outsourcing services.
The company also plans to use its centers in Bangalore and Hyderabad in South India for the remote management of customers' IT operations. The two centers in India already employ 2,250 people, do product development, and offer product support to Oracle customers worldwide.