Oracle will struggle to meet its target of making applications half of its total business by 2001, analyst group Ovum has claimed.
"This is make or break year for Oracle applications," said Lauren Lachal, joint-editor of Ovum Evaluates: Corporate Financial Systems. There must be a shake-up on management, business and product levels if Oracle is to hold its own against SAP and Baan, he added.
However, Oracle is implementing changes to ensure the target is met, claimed Dick Leach, EMEA product manager for Oracle financials. "It's true that the rate of growth has not been as high as we would have liked," he admitted.
Oracle has already started to implement changes in product strategy and management structure with Oracle 11, launched last month, Leach argued.
Ray Lane, Oracle's president and COO, has already signed off huge expenditure plans, he claimed. Though unable to give details of the marketing budget, Leach said there is an internal training budget amounting to $10 million (#6.1 million) on Oracle 11 skills.
Leach conceded that Oracle had scalability problems with previous applications, but said this had been addressed in new products. He also rebuffed allegations that its applications had integration problems with its tools and database products.
Ovum's Lachal also warned that Dutch ERP vendor Baan has spread itself a little thin, due to growing too fast, both through acquisition and organic growth.
However, Gareth Lloyd, commercial director at Baan UK, insisted that Baan's infrastructure had grown with its market share.
He flatly denied speculation that Baan had been buying market share and ruled out any possibility that Baan would put the brakes on growth. The corporate aim is to be a $2 billion (#1.2 billion) business by 2000.
Lloyd also denied Lachal's claim that Baan was a hotch-potch of different companies that need to be integrated.
The Aurum product from an acquisition in the third quarter of last year has already been integrated into Baan's product set, he said, and both Coda and Baan customers would be told of the intentions for the integration of the two product streams by the end of the year.
Annual revenues for year ending 31 May 1998 were $7.1 billion (#4.4 billion), with the database business accounting for $5.3 billion (#3.3 billion), up 17% on 1997, and the applications business accounting for $1.8 billion (#1.1 billion), up 58% on the same period. Profits for the year were $955 million (#585.9 million) compared to $845 million (#518.4 million) for 1997.
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