For most US IT companies bent on expansion overseas, the first port of call is typically the UK where at least...
the locals speak (almost) the same language as they do in San Francisco. That was the case when Oracle first set up shop in the UK in the 1980s, run by a team of former ICL executives.
Oracle UK had a powerful and individual identity. This sense of self was undoubtedly helped by the rise to the global number two slot of the UK's Geoff Squire. But once Squire left the company, US executive Ray Lane took over and the sense of identity began to morph into something else.
Lane didn't want to know about ideas such as Oracle UK or Oracle France; he wanted to think in terms of Oracle in the UK or Oracle in France. (His stance was reportedly made all the more hardline by an attempt by Oracle France to change the corporate livery from red to blue on the basis that red, for some reason, wouldn't work in France!) Oracle has been working more and more towards the creation and cultivation of a global identity that supersedes national borders.
That said, it still comes as something of a shock to realise there is no country managing director for Oracle UK. Indeed, the latest head of Oracle EMEA doesn't even think in terms of Oracle Europe, despite his own job title. "Oracle in the UK, Oracle UK - that's all disappeared. There's not really an Oracle EMEA or an Oracle Europe," says Loic le Guisquet. "As a company we are global in certain dimensions and local in others. We have country leaders in every country in order to keep the countries focused on the specific needs of the countries, but they don't own the business in those countries. That's been gone for a long time. We've gone away from having country heads who had their own HR departments or their own marketing departments inventing local marketing collateral."
Doesn't that risk Oracle being seen as a US firm embarked effectively on technological and economic colonialism? Can European customers expect Oracle bosses in San Francisco to appreciate their needs? "It's always interesting to be heading up an EMEA business for a US headquartered firm. Europe is a very sophisticated environment, with many different languages and cultures, different ways of buying, different holiday seasons and so on. But I am fortunate that we have two Presidents at Oracle in the form of Charles Phillips and Safra Catz who travel a great deal and who understand Europe very well. Some of my peers in other US headquartered firms might find aspects of their role challenging, but Charles and Safra come to Europe all the time."
Le Guisquet sees the globalisation push as an inevitable and perfectly reasonable evolution."I've been with Oracle more than twenty years now so I've seen many phases of its development. For EMEA, we operate in 147 offices in 58 countries," he adds. "I can give you examples of us working locally in societies. For example, we are working in Switzerland with local homeless charities. On the other hand, we have things that are totally global, such as our billing systems business for telcos. That's a totally global business unit. In most of our offices, we play a part in the local community as our employees take on activities. We have the Oracle Academy, for example, where we help support 400,000 students and teachers in 60 EMEA countries."
What's more important than national infrastructures, maintains le Guisquet, is maintaining a clear view of the identity and needs of the local customer base. "Innovation doesn't just come out of laboratories; it comes from customers as well," he says. "That's why we make sure we engage as much as possible with our customers. We have 30 customer advisory groups in Europe who are there to help us to get customer input into what it is they would most like to see us do and get into our products. What is it that would help them the most? What are the feature sets that would make the most sense from the customer perspective? It's this that helps us to leapfrog the competition. I can think of a couple of good examples of innovation in action in Europe. CERN is regarded as being at the leading edge of innovation. The data that is produced by the Hadron Collider comes in to a huge grid system that completely embraces and uses the most futuristic technology that we have.
"Or there's the business example with BT. BT's been using our technology for a long time, but they're now using our business intelligence capabilities so that 10,000 users can access data on their customers behaviour. This is paradigm shifting for BT as it's allowing them to do real time decision making. Rather than having a big database of customer behaviours and buying patterns which they can then mine and analyse, they are now able to turn call centre agents into the people who make those decisions. Rather than having them follow a script which they hope might match some customers, they can create the right package and offer on the fly that will match specific customers. So even a junior call centre agent is now able to make very smart proposals based on the needs of the specific customer. They've used this for outbound calls, now they plan to move it on to inbound calls." Le Guisquet has stepped up to the mark as the head of EMEA operations at a difficult time. He assumed the role last December, just as the economic crisis was gathering a head of steam. He has taken charge at a time when Oracle's EMEA revenues have been under pressure. The fact that this is a global crisis and that rival firms, such as SAP, have been under the same pressures doesn't make his life any easier.
But le Guisquet can see a glimmer of light at the end of the tunnel according to figures from a Financial Times study. "Based on their findings, the economic situation in Europe at the moment is not much different to how it is in the rest of the world. If we could go back in time to last July and look at the forecasts then, it looked a bit bleak then, but the economy has worsened throughout the world," he notes. "But we have seen some good signs. For the first time in 4 quarters we've seen some signs of improvement. We can see that the economists are forecasting that things are improving and we obviously hope that the good signs are going to translate into better times for customers."
While he argues that the economic situation is essentially a global situation, le Guisquet does highlight a particularly European aspect to it. "We have a specific situation in Europe which is having an unfortunate impact on everyone," he explains. "Eastern Europe has been a big engine of growth with some Western countries investing more than their GDP in Eastern Europe. That's left some countries more exposed than others. It's difficult to say which countries in Europe will come out of recession first. The UK adopts innovative technologies very quickly and I think it's doing very well." While he insists that he can't predict where and when recovery will happen on the basis that he's not an economist, le Guisquet does offer one interesting theory on the subject. "If we look at the recovery from the point of view of industry sectors, what we see is the telco industry doing very well overall," he suggests.
"There's also a lot of innovation going on in the public sector where there's a lot of pressure to simplify and improve processes. Perhaps surprisingly, we see the financial services sector doing rather well. That sector hasn't collapsed as you might have thought. Financial services companies have a lot of legacy systems that they need to improve so they're still investing in doing that. I think manufacturing companies have been more badly hurt than many other sectors. In general, countries that have more services-based economies will come out of recession quicker while those that are manufacturing-heavy are likely to struggle a bit longer."
He also argues that the oft-cited time lag between the US and Europe can have its advantages, enabling European firms and economies to learn from mistakes made across the pond. "One of the things about Europe is that the reaction to European peaks and declines is roughly about 6 months later," he says. "Now the good thing about that is that it gives us time to adjust and prepare for our customers. You can do a number of things to prepare and get ready. So we have done a lot of things to help customers through that. We have focused on helping people to save costs because we know that's what they're going to have to do through this crisis. We're trying to help them streamline their processes. But of course it's also the right time to plan for future growth and invest. But it takes time for people to adjust to a crisis and to move on." When it comes to investing, le Guisquet argues that Oracle's completeness of vision is a critical differentiator for the firm.
"We follow a very clear strategy. We want to be as complete as possible. We want to offer a comprehensive solution, from the front-end CRM through to billing and provisioning and so on," he explains. "We can provide customers with a complete solution, but we also want to be able to present it to them in an integrated way, rather than have customers have to buy it in a piecemeal way. We want to create a footprint in all the specific industries. We are organised for a number of lines of business across countries. We understand inside out how a retailer works, for example. Knowing about your customers and your customers' business is what really matters."