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To: Lizzie Tudor who wrote (67727)	4/22/2005 9:28:45 AM
From: RetiredNow	Read Replies (2) \| Respond to of 77400

1. the whole purpose of CRM is to optimize the costs of your labor force. With labor at .05 the cost of US workers, it isn't really necessary. It's not the cost relative to the U.S. that matters. It is the cost to the company doing business. So if an Indian call center can reduce their own costs to make more money, then they will do so. CRM software allows companies to hire fewer workers, which save those companies money. So CRM software makes sense for Indian companies just as it makes sense for any call center company anywhere in the globe. 2. Oracle software costs are too high for the indian economy. Oracle will have to compete against indian companies price-wise. Oracle software can be reduced in price to make it affordable for the Indian markets. The variable costs to Oracle of selling additional Oracle CRM software are extremely low. It's merely the cost of the sales people, the CDs, and the documentation. Software companies price their products according to what the market will bear in any country they enter. The price points in India are much lower, but that doesn't stop CRM companies from selling their wares there and still making money on it. 3. If they DO decide to drop the price of their software to compete in india, it introduces issues for pricing in the premium markets. Not true. Most software sold to the enterprise markets are sold on a licensing basis. So theft is not common place among enterprise companies. U.S. based companies can try to demand a comparable price to what Indian companies are paying, but they aren't likely to get it. Every company that has any brains has price lists that vary based on the country the buyer is in. Software is no different. Anybody who gave this any thought (which Oracle apparently DIDN'T) would have to question moving their business to emerging markets IF they have a highly profitable US operation. This is just basic business stuff. I think it is you who may lack some key knowledge. Software companies are highly leverageable. Once they've spent the money developing the software, it costs them pennies to nothing to copy the software to a CD and sell it at scale. So their contribution margins are extremely high on software, which allows them to vary pricing by country and reduce prices to very low levels and still remain very profitable. Oracle and every software knows this, which is why moving into as many markets as possible, including those with lower prices points, makes economic sense.