Oracle aims to improve customer loyalty and partner relationships as a way to boost its bottom line over the next couple of years.
The database supplier, like other software companies, is experiencing a slowdown in growth as a result of the Year 2000 issue, which is causing organisations to freeze budgets, and the economic crisis in Asia-Pacific, which is threatening to plunge the world into recession.
This means that companies are delaying the purchase of new products and upgrades. As a result, Oracle has seen only a relatively small percentage of its installed base move from release 7.3 of its database to the much touted version 8, with many customers not planning to migrate until after the millennium.
Ray Lane, Oracle?s president and chief operating officer, in his keynote speech at the Oracle Openworld user group conference in San Francisco today, said he had been looking at how to equip the firm to deal ?with the most profound change? taking place both within the organisation and outside - a change that was being driven by the Internet. He dubbed the new scheme ?Oracle 2000?.
?We want to drive customer referenceability to 100 per cent by the end of 1999, so we need to understand the needs of disloyal customers and their concerns.,? he said. ?We need to focus on customers in their zone of concern and put together a number of programmes to raise their affection. This is not altruistic, it?s driven by profits. For every five per cent shift on the loyalty curve, you make a 35 per cent increase in profits,? he explained.
The aim, he said, was to make it easier for customers to do business with Oracle and to get the information they needed when they needed it. As a result, the supplier intends to hire more account management personnel, who will come from a service rather than a sales background, to give customers more customised support.
The company plans to improve its product release process by improving internal information flow and giving customers a chance to provide feedback. It will also double the number of sales consultants to ?increase value by industry?.
In future, instead of simply pushing out vast amounts of new product releases onto the market, Oracle will optimise and package them for vertical markets, including non-conventional ones, and will try to anticipate how these markets are changing. This repackaging will include not just the firm?s applications as it does now, but also its database and tools.
On the partner side, Oracle is increasing its budget by $40 million to boost training, education and channel programmes. This includes a two per cent increase in marketing funds for those members of its third party channel using the ?On Oracle? brand.
The company is also consolidating its diverse partner programmes into one global hierarchical scheme. The initiative will be based on the Oracle Technical Network programme and will include 100,000 developers, 10,000 programmers, 2,000 certified solution partners, 200 certified advantage partners and 200 global partners.
Entry to each level will be dicatated by their commitment to the Oracle product line, and the level of services offered by the supplier will be commensurate with this commitment.
Oracle is also setting up a venture capital fund to back companies that want to develop industry-specific applications for its Oracle 8i database that was launched a couple of months ago.
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