Oracle in China: Kiss My SaaS

Posted on May 14, 2008
Filed Under China Business, China Distribution, China Internet, China SMB |

Oracle Corp, the world’s largest enterprise software supplier, has launched its CRM On Demand Release 15 and Mobile Sales Assistant for BlackBerry products on the mainland, a move it hopes will improve the productivity of customer sales teams.

“We are widening the functionality gap over competing solutions to grow our market share and address the rapidly emerging opportunity with what we call Social CRM,” said Simon Banks, a general manager for CRM On Demand at Oracle Asia-Pacific.

…The main component of Oracle’s new on-demand CRM products is called Sticky Notes.

It allows users to take specific objects, such as “top accounts” or “contacts” and include them within their preferred Web portal applications, such as iGoogle or MyYahoo.

…There is plenty of room to grow for on-demand CRM players on the mainland, but local players - such as Xtools CRM and 800App.com - lead domestic demand, according to Balaka Baruah Aggarwal, senior manager at Singapore-based information technology market analyst firm Springboard Research.

Springboard forecasts that the SaaS CRM market in Asia will reach US$460 million by 2010, up from US$69 million in 2006.

“We estimate the SaaS CRM market on the mainland, Hong Kong, Taiwan and Macau will make up about 20 per cent of that market,” Ms Aggarwal said.

This comes on the heels of Salesforce.com’s splash in China.

SaaS (software-as-a-service) is on one level (think email) already ubiquitous, on another (think salesforce.com) a fast-growing threat to traditional client-server solutions, and on another (think virtual data centers and cloud computing) still a fair bit away. Everyone (including Microsoft) are positioning themselves with SaaS-enabled applications for the future network-centric computing world.

There’s no reason why China won’t move in the same direction. If anything, China may move even faster than the rest of the world. One of the benefits of a late adoption of IT is that there are less legacy systems cluttering up data centers around China.

However, this doesn’t necessarily mean that China should expect an explosion of SaaS use. It’s not that the technology is too new or that the infrastructure isn’t in place - China has both the IT savvy and the bandwidth in spades. The problem is with customers.

Simply put, not a whole lot of Chinese firms other than enterprises have the business processes in place to really benefit from applications such as CRM or ERP. SMBs in China have embraced IT, but it’s still just an adjunct to operations rather than a value-adding enabler.

The article included quotes from enterprises on how wonderful Oracle’s solution is and how much better their lives are for it, blah, blah, blah. But not until China’s SMBs get their heads around IT as a core business tool will SaaS start to take off.