Oracle: Competing with the Filing Cabinet
It's no surprise that Oracle is the company the rest of the software world loves to hate. Back in 2004, it picked a nasty fight with applications giant SAP (SAP) before bulking up with the acquisitions of PeopleSoft, JD Edwards, and Siebel. More recently, Chief Executive Larry Ellison threw down a gauntlet to open-source partner Red Hat (RHAT), announcing that Oracle (ORCL) was mulling a move into Linux operating systems. Combine that with ongoing grudge matches against Microsoft (MSFT) and IBM (IBM), and you would think Ellison has his hands full (see BW Online, 9/12/05, "Now, Oracle May Finally Rest"). Nope.
On Mar. 1, Oracle opened a new front, only this time it's in the enterprise-search arena. The company announced a new Secure Enterprise Search product, taking on smaller search companies Autonomy and Fast Search & Transfer in a growing $350 million slice of the search market.
That may seem like small potatoes for the world's second-largest software company, but Ellison apparently doesn't think so. On the company's third-quarter conference call Mar. 20, many of his comments were about the new enterprise search, which he described as "one of our biggest products in years" -- and, importantly, one that proved the acquisitive company hadn't lost its innovative edge (see BW Online, 3/21/05, "A Chill in Oracle's Hot Numbers").
BusinessWeek Online reporter Sarah Lacy caught up with Robert Shimp, Oracle's vice-president of global-technology business, to talk about the importance of this product, why Oracle shouldn't be considered a latecomer to the search market, and the problem that companies still face despite millions spent on other search products. Following are edited excerpts of the conversation.
A host of companies small and large are all jumping into the search game, and increasingly on the enterprise side. Why all the action in the enterprise?
There are several very distinct segments. What people are most familiar with is the consumer marketplace, or what's available publicly on the Web. That's valuable, but only gets at a very small fraction of information around the globe, and it gets at zero enterprise information. Traditionally, [enterprise search] is provided by small specialty firms. There's such an opportunity for a more pervasive enterprise-search solution.
What's Oracle's history in the search business?
Oracle has been in the search business through Oracle Context technology for over a decade, but recently we came out with Secure Enterprise Search. Oracle Context was aimed more at the academic and online communities. It was used by the huge organization that runs the Library of Congress, for example.
We were able to apply a lot of that expertise [to the new product], which is a more secure enterprise solution targeted at companies that want to let employees search corporate databases. Our unique differentiator is that secure capability. Companies want to [let workers] see only the information they're permitted to see. Identity management, based on your role as an employee, is huge.
As much as Google (GOOG) and Yahoo! (YHOO) have made strides, consumer search still has a ways to go. We're still getting a bunch of links, not answers. It seems really good Web search is hard. Is it harder still to do good enterprise search?
Consumer search products are indexing Web pages on the Internet. Those pages are open for anyone to see. That's easy. To talk about information inside a transactional database is harder. Those kinds of systems aren't readily open for any kind of agent to index the information in them. It's private information and companies want to manage it carefully.
So, all these consumer search engines miss a huge portion of the data in this world that are in these transactional systems. You need a specialized tool to go into databases and extract that information.
Is Oracle late with this product? There are a lot of small and growing enterprise-search companies, and some have been around since the late 1990s. At the same time, Google and IBM also are getting more serious.
The growth of information is explosive, and there are greater regulatory restraints being placed on companies, and demands in the form of lawsuits. There's a reason they need to have better access to data -- not just transactional data but e-mail, PowerPoints, and so on. The ability to perform an enterprise-wide search on information is a very powerful notion, not only for the average knowledge worker but for administration, lawyers, and so on. It's not being done. We've heard it a great deal from customers.
What's the return on investment? It seems like it would be a product that's hard to quantify.
It can dramatically reduce risk and exposure, plus you get all the efficiencies of employees being able to do their job better. It also eliminated redundancy of information that should have been deleted.
Who's Oracle's biggest competitor in this space?
Our main competition is the filing cabinet. The reality is most people simply print out pieces of paper and try to manage the information themselves. The manila file folder is the ultimate enemy.
It's clear many, many players in the industry are looking at this. We think that it's the major infrastructure-software vendors that will come to be the primary players in this market: Oracle, IBM, and Microsoft.