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Technology Stocks : Oracle Corporation (ORCL) -- Ignore unavailable to you. Want to Upgrade?

To: MeDroogies who wrote (10453)	4/9/1999 3:18:00 PM
From: Jim Willie CB	Read Replies (1) \| Respond to of 19079

McDroog, exposing my limited knowledge of Oracle's ERP products in last couple years... my computer buddies assured me that ORCL has been an emerging but minor player in ERP recently, soon to become major... could be my perception is skewed because Oracle ERP sales relative to their overall sales makes for small percentage... but ORCL is taking chunks of the ERP pie given the size of the base of DB customers out there, ERP is a young pup with lots of room to grow... companies with ERP potential who FAIL to use it will be at disadvantage... the late adopters IMO might flock to their database vendor Oracle thanks for setting me straight / JW

To: MeDroogies who wrote (10453)	4/12/1999 10:45:00 AM
From: John Stichnoth	Respond to of 19079

There have been a couple of articles in the Economist on ERP that mention Oracle. Here's one, from June 1998: No factory is an island Multi-coloured widgets to go—now!, says the market MANUFACTURING used to be pretty simple. The factory manager or the production director rarely had to think about suppliers or customers. All he did was to make sure that his machinery was producing widgets at the maximum hourly rate. Once he had worked out how to stick to that “standard rate” of production, he could sit back and relax. Customer needs? Delivery times? Efficient purchasing? That was what the purchasing department and the sales department were there for. Piles of inventory lying around, both raw materials and finished goods? Not his problem. Now it is. The 1980s were the decade of lean production and right-first-time quality management. In the 1990s the game has grown even tougher. Customers are more and more demanding. They increasingly want the basic product to be enhanced by some individual variation, or some special service. Companies sweat to keep up with their demands, in terms both of the actual products and of the way they are delivered. A world-wide survey of over 900 manufacturing companies by Deloitte Consulting has found that, though the companies' products seemed better than ever before, customer dissatisfaction has kept on growing. The solution lies in “mass customisation”. This means making basically similar products in hundreds, even thousands, of variations to suit specific customers' needs. Some customers want deliveries in small lots at short order. Others will take bigger deliveries less frequently. Either way, of course, they want it at mass-production low prices. The only way to have any chance of satisfying them is to spread lean-production techniques throughout the whole company, not just the factory. The factory no longer stands aloof from the grubby business of haggling with suppliers and customers. “About 15 years ago,” recalls Dale Marco, a senior consultant at A.T. Kearney, a Chicago firm that specialises in manufacturing practice, “we began to see you couldn't really separate physical distribution and manufacturing. From there came the recognition that you had to see them both as part of a supply chain.” The new way of doing things connects the factory to its suppliers upstream and its customers downstream. Daniel Jones and James Womack, two of the authors of “The Machine that Changed the World”, returned two years ago to lean techniques in a second book, called “Lean Thinking” (Simon & Schuster, £16.99 or $26), which applies the idea to the whole company. They examined, for instance, the various processes required to put a can of coke on the shelf of Tesco, a British supermarket group: the “value chain”, as they called it. A team of researchers from Cardiff Business School found that the chain of actions required to make the can—starting at the bauxite mine in Australia, and passing through the various smelting and rolling processes to the manufacture of the can itself, printing its label, filling it with the cola drink and getting it into somebody's refrigerator—took no less than 319 days. Making the can took far longer than making the coke. But, even so, only three hours of that time was spent in doing something that actually added value. The rest was spent in storage and transport; as many as 14 storage lots and warehouses were involved. The blame for this apparently wasteful way of doing things lies with the huge and inflexible machinery needed for long production runs, in order to capture the economies of scale. This is the so-called “batch and queue” system common to most forms of manufacturing. Unfortunately, it requires the piling up of large buffer stocks of raw materials and component parts to make sure the machinery can be continuously fed. Each of the seven main links in the cola-bottling chain naturally seeks to maximise its own return on capital. The aim of the Tesco analysis was to see whether some of these economies of scale, at one or another of those seven links, was outweighed by the waste involved in all the handling and storing required. Since the book came out, Mr Jones says that Tesco has made some progress in reorganising its shipments so as to cut out wasted time. “The way to do this”, he says, “is not to start at the raw-material end but to work your way up the chain from the store.” In time, he suggests, some of the suppliers may use smaller and cheaper machines, in themselves less economical than mass-production ones, which may nevertheless cut the cost of the total operation. The magic offered by software As companies tear down the walls between the different parts of their work, they are realising that the various parts need to share the same flow of information. Hence the explosion in manufacturing software programs which let them integrate their financial data with payrolls, manufacturing and inventory records, purchasing information and the rest of it. This is known as Enterprise Resource Planning, ERP : the magic tool-kit needed to spread lean thinking throughout a company. Would-be lean companies, from Toyota to the latest recruit, are scrambling to have ERP s installed on their personal-computer systems. The software comes from companies such as SAP , the German leader in the field, Baan, PeopleSoft and Oracle. An ERP is supposed to take into account all sorts of numbers, so that a company can know how efficiently it is using its various resources—people, money, machines—to satisfy its customers. If all aspects of the company are recorded in the same software, it is easier to keep the whole manufacturing operation in balance and to keep work flowing smoothly through the factory. Bottlenecks and imbalances show up quickly, and can be put right. Needless to say, for every dollar a company spends with a software company to buy its ERP program, it finds itself paying another six to a management consultancy to adapt the program for its factories. No wonder these consultancies speak of ERP in reverent tones. But putting all the company's information into one giant software program is not without risks. “It's like pouring concrete over your business plan,” says one now-sceptical expert, David Upton of Harvard Business School. ERP s may or may not be the answer for companies that want to become leaner and nimbler. But there are other means of improving the way they buy their components and their raw materials. The Internet is giving a huge boost to the process. By using the Internet, or various private extranet systems based on it, companies can deal more directly with their suppliers to improve deliveries, stock levels, designs and lead times. Even better, they can use the networks to get lower prices by holding electronic auctions for the supply of basic components. Leading the way is a system known as Automotive Network Exchange, which America's Big Three car companies started as a pilot scheme in January and are due to put into operation with most of their suppliers this summer. Next year they plan to extend it to Europe. Any company wishing to sell to the Big Three will then have to get online, and be ready to settle down to some serious electronic bargaining. Other industries have happily taken up the idea. Boeing already runs its spares business through an extranet. General Electric has one of the biggest systems in the whole of manufacturing for dealing with its suppliers. All this should produce huge benefits. It will make it easier and swifter for the assembly-line companies and their suppliers to work in partnership. Engineering designs on the web will save time and money by cutting out a whole series of meetings and consultations. By turning many car parts into commodities that can be bought and sold at auction, the web will make the market more open, competition keener and prices lower. The old ways of buying and selling were time-consuming and expensive. The new way opens the door to the “mass customisation” that lean producers now dream of. None of this will make a byte's worth of difference, of course, unless manufacturers are nimble enough to seize the opportunities technology is offering them. After years of downsizing, rightsizing and all the rest of it, this might seem just another pointless redrawing of organisational charts. Not at all, Mr Schonberger vigorously replies. He maintains that the essential thing is for everybody in a company to understand how a business runs itself successfully. Out, he says, with management by edict and by procedures: that is just a way for bosses to tell everyone below them what to do. In the new century, Mr Schonberger wants manufacturing to be a process in which the only objective is to meet the customers' needs, in which all the assorted kinds of workers feel involved in the task, and in which they are able to make use of an array of facts and data supplied on electronic platters. So how does a company get this way? By organising production around customers, not the other way round. Sometimes this can mean moving halfway across the world. Not only do companies have to chase cheap labour for the simpler parts of their new global supply chains; they also have to bow to the customers' demand that they provide product and service on the customers' doorsteps. The next two articles look at what this is likely to mean in the next stage of the manufacturing story.

To: MeDroogies who wrote (10453)	4/12/1999 10:59:00 AM
From: John Stichnoth	Read Replies (1) \| Respond to of 19079

And, here's another, from March 1999 (Featuring Ellison the Outrageous, and a terrific view of ORCL's strengths.): Software. Data mining 20-Mar-99 The worlds two largest software firms are coming to blows over databases. Which will win depends on the future of Internet computing Software ORACLE'S boss, Larry Ellison, likes to describe competing with Microsoft in apocalyptic terms: “It's Microsoft against mankind, and mankind isn't winning.” He also thinks that Bill Gates's firm should be broken up for repeated antitrust violations. For its part, Microsoft sneers at the bombastic Mr Ellison as a failed visionary whose attempts to supplant the PC with a low-cost browser-based “network computer” went nowhere with consumers. Yet the funny thing is that, until now, neither firm has really competed head-on against the other, even in databases. Microsoft's database, SQL Server 6.5, was a lightweight compared with Oracle's, suitable only for departmental use and smaller businesses. What is more, Oracle benefited from the success of Microsoft's Windows NT operating system for business users, selling many more databases than it would have had it been confined to the slower-growing Unix system. In 1997, nearly 30% of Oracle's database sales came from its share of the NT market. Yet Microsoft has long been eyeing the $9.5 billion-a-year relational database market. In January it pounced, with SQL Server 7. According to Doug Leland, the Microsoft manager responsible for marketing the new database, SQL 7 “is a stake in the ground that puts us squarely into the enterprise class.” He adds ominously: “Our friends in Redwood Shores are going to feel the pressure.” It is easy to see why the database market has begun to matter to Microsoft. Databases are the all-important platform for “enterprise resource planning” ( ERP ) applications, pioneered by Germany's SAP , which have revolutionised the business processes of large companies over the past few years. There is a new emphasis on mining data to get a detailed understanding of what is really going on inside a firm. Microsoft needs SQL 7 to help spearhead its next release of NT , christened Windows 2000, which it claims will be able to run even the most powerful server computers that currently rely on different types of Unix. Microsoft has worked closely with consulting firms and big ERP suppliers, such as SAP and PeopleSoft (though not, oddly enough, with Oracle), to create a platform that they can recommend even to their biggest clients. SQL 7 is indeed a “good enough” database, according to Betsy Burton, a consultant at Gartmore. It will support online-transaction processing by about 500 concurrent users. That number will grow when Windows 2000 is launched towards the end of this year and Intel's powerful new Xeon processors also become available. But, as always with Microsoft, the database's success will depend less on its own qualities than on the company's sheer market power. SQL 7 will be bundled with other Microsoft products, such as BackOffice, attracting price-conscious companies. A further $600m has been earmarked to sweeten contracts with inducements. Microsoft has nearly $20 billion in cash, waiting to be siphoned into grabbing extra market share when needed. It will also use the clout it gets from the NT operating system to win the backing of hardware firms. Perhaps most crucially, Microsoft will have strong support from the dominant ERP supplier, SAP , because of the German firm's own rivalry with Oracle in the business-applications market. Delphic Against such an onslaught, many firms would panic. And for Sybase and Informix, relative minnows of the database industry, the prospects indeed look cloudy. But Oracle is not without advantages of its own. SQL 7 has fewer features than Oracle 8, the latest release of Oracle's database, and it cannot match its performance. In particular, Oracle 8 will support a couple of thousand, as opposed to a few hundred, concurrent users. With Unix now the preferred platform for “mission critical” applications, SQL 7's restriction to running only on NT guarantees Oracle a lock on the high end of the market. Oracle also has a large installed base. It dominates the Unix market and provides over 40% of the databases that run on NT (see ). Oracle also claims that 87% of Fortune 500 companies have an Oracle database; and that today a majority of ERP applications run on Oracle. Because database customers do not like to chop and change, it is almost inconceivable that Oracle users will suddenly switch to SQL 7, however tempting the price. But what gives Oracle most confidence is the conviction that computing is moving its way. Although Mr Ellison was wrong about the network computer, he is probably right to say that “the Internet changes everything”. Oracle is betting on a type of Internet computing in which applications are centrally managed, backed up and administered. Users will gain access to information and applications using a browser that can run on a personal computer or an even simpler device. Oracle may charge more than Microsoft, but it says that the extra costs of running SQL 7 on NT more than offset any saving. To ram home the message, Oracle has this month released Oracle 8i, which is designed to be not just a database, but a complete platform for Internet computing. Oracle believes that the rigours of doing business on the Internet are creating a demand for ever more sophisticated database technology, and that 8i will be a natural choice for electronic commerce. Firms now need not only to give their employees access to a database, but also to extend parts of their database to customers through corporate “extranets” or the public Internet. With customers doing their own ordering and billing through the Internet, databases must be able to handle vast numbers of concurrent users and provide information fast. Oracle claims that the ten most-visited consumer websites, including Yahoo! and America Online, are powered by its databases, as are the ten biggest business websites (with one exception—www.ibm.com). Oracle 8i should tighten the company's grip on the exploding e-commerce database market, where IBM is its main competitor. But it has another purpose too. By incorporating software that allows traditional files to be stored and managed by the database, Oracle 8i also removes the need for a big, all-purpose operating system, such as Windows 2000. To emphasise this, Oracle has joined Sun Microsystems to create an Intel-based server, called the “Oracle 8i appliance”, with an Oracle database and its own simple operating system. Ready to use out of the box, this, Oracle says, is a cheaper and less complex alternative to a database that runs on NT , because it minimises the cost and complication of the operating system. Several large computer makers, including Compaq, Hewlett-Packard and Dell, have already said they will sell their own versions of the appliance. With much of their distribution aimed at small and medium-sized firms, the machine will take the fight to Microsoft. As Merv Adrian, an analyst with Giga Information Group, puts it, “Microsoft is playing the commodity card, but Oracle has gone one better.” Who—apart from customers—will win this database war? The answer depends to some extent on Windows 2000. Until it is established, SQL 7 will be a capable, cheap database in search of an operating system. More decisive, however, will be the speed with which the Internet approach to computing that Oracle preaches takes off. For now, Oracle not only remains in pole position, but has the more compelling vision. That said, few firms can play catch-up to more devastating effect than Microsoft.