Good day, ladies and gentlemen, and welcome to Oracle Communications Industry Strategy conference call. All participants are in a listen-only mode. If you should require audio assistance, please press star then zero to reach an operator. I would now like to turn the call over to Shauna O'Boyle.
Thanks, Jamie. Hello everyone, and thank you for joining us today as part of our ongoing educational speaker series hosted by Oracle. I am Shauna O'Boyle, Senior Manager, Investor Relations, and today is Thursday, July 11th, 2013. Joining us today is Oracle executive, Senior Vice President, Bhaskar Gorti, and equity research analyst, Raimo Lenschow of Barclays. Today, Bhaskar will discuss Oracle Communications Global Business Unit. However, he will not be discussing any information today that is not already publicly available. At the conclusion of Bhaskar's presentation, we will turn the webcast over to Raimo, who will moderate the question and answer portion of the webcast. However, you may submit questions at any time during the presentation by typing your question in the Q&A box in the lower part of your screen. Please keep in mind that we will not comment on the current quarter.
As a reminder, the matters we will be discussing today may include forward-looking statements, and as such, are subject to the risk and uncertainties that we discuss in detail in our documents filed with the SEC, specifically, the most recent reports on forms 10-K and 10-Q, which identify important risk factors that could cause actual results to differ from those contained in forward-looking statements. You're cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this presentation. Please keep in mind that we will not obligate ourselves to revise, update, or publicly release the results of any revisions of these forward-looking statements in light of new information or future events. Lastly, unauthorized recording of this conference call is not permitted. I will now like to introduce Bhaskar.
Thank you, Shauna. Hello, everyone. My name is Bhaskar Gorti. I lead Oracle Communications business, and I want to thank Raimo and Barclays for hosting this call and all of you for joining. It's a privilege to have this opportunity to share with you Oracle's strategy in telecommunications. My mission and that of my organization, it's very clear and comes directly from our CEO, Larry Ellison, this was his quote from our March earnings call. This is a very strategic industry for us, and I want to share with you how we are building upon and serving the telecommunications market. If you look at what our industry strategy is, this started almost eight, nine years ago. Larry had a vision of how we can extend our focus in some key industries that are going through rapid transformation.
We have focused on industries like financial services, retail, utilities, health sciences, public sector, and manufacturing. Today, I'll focus on communications. That's the industry segment that I run. Our approach has been very deliberate in these verticals to really differentiate and increase the value we deliver to our customers. Through organic investment and some selective acquisitions, we have built verticalized business units that focus exclusively on some of the mission-critical technology, and in my case, I would call carrier-grade solutions that are needed by these vertical industries. At the same time, these industry capabilities are built into and collaborated all the way down the Oracle stack, whether it's in CRM or ERP or our business intelligence, our middleware, our database, all the way to our hardware and systems. To give you a flavor for our addressable market, service providers, this is their IT spend.
If you look at it's pretty significant, about $55 billion. Today, we are a leader in business support systems and operational support systems, and also service delivery. With Acme Packet and Tekelec, it helps us expand further into the communications network infrastructure. To give you a flavor, the CapEx that service providers spend on the network side is greater than that of the IT. In addition, we have some really innovative technologies and solutions here that help large enterprises to speed the adoption of IP-based communication and collaboration, and also lower their cost, but also provide a rich feature set of communications and collaboration for their employees, customers, and partners. That segment represents an additional market opportunity of about $20-plus billion, according to Gartner, and one which we can leverage very strongly given Oracle's strong position in global enterprises worldwide.
This unified communication technology provides secure, trusted, reliable, and regulatory-compliant communications to industries like banking, healthcare, commercial services, and public sector. Now, across all industries, what's happening is the user expectations. Any service, anytime, anywhere, on any device. The number of connections are multiplying every day, and we are just at the beginning of these connections to multiply significantly with the whole concept of machine to machine. While all these connections are increasing, the touch points are increasing, the locations are increasing, the expectations are skyrocketing. The expectations are to have a seamless service across any device, any media, and any network, all along having a quality of service and reliability. Especially in the business segment, when you're talking about telemedicine, security and surveillance, and emergency services, reliability and quality is extremely important.
Some key industries like healthcare, financial services, the regulatory compliance is very critical for the customer's communication data. All this has to be personalized, whether it's at home for a digital lifestyle or in the enterprise for an enterprise dashboard. This is very important these days for the right decision to be made, to have the right information on the right device at the right time. The context there is also extremely important. What are service providers faced with? They're all moving to all IP networks. These IP networks deliver the best of the traditional telephony circuit switch networks, which are voice-oriented. They're high quality, but they're costly to maintain and slow to deliver new services. You look at the other side, the IP internet, it's data-oriented, low-cost packet routing.
The challenge there is it's best effort in delivering service, and it's inconsistent in quality depending on where you are. An all IP network is where everybody's moving to, where these are voice, data, and video-oriented. They support fixed and mobile, but at a lower cost and a guaranteed quality in service. Operators are transforming their business to manage these customers and moving away from silos that today exist in many of the operators around the world. Policy management and IMS are strategic in this evolution of an all IP network. What are some of the challenges they face as they're deploying these IP networks around the world? They have to deliver scalable services in a secure, reliable, and more importantly, in an interoperable manner. These are significant investments they have to make, so it has to go beyond just optimization.
They have to be able to monetize these investments and their ability to differentiate services from over-the-top layers. The traditional approaches have been pretty expensive and complex. Large enterprises also have similar set of challenges. They have to provide real-time communications in a secure manner, but at the same time, at a lower cost, and enable their employees and their customers and their partners to interact with them on any channel, on any application, and any device. We all hear bring your own device, BYOD. That's becoming a real thing across every enterprise. These are some of the challenges in deploying an all IP network. What's Oracle's strategy in here? Our strategy is very simple. It's a four-part strategy, and it's first of all focused on we have a product-based approach. One, we want to build a comprehensive, complete end-to-end portfolio.
Two, we want to build these using open standards in the industry, and some of the standards that are used in the industry in the telecommunications are developed by engineers who are here in our business. We want to build these products so that they're integrated and they're engineered to work together. We don't want to integrate them and spend customers' custom dollars in doing it on-site. We want to engineer these solutions to work together. We're doing that all along maintaining the flexibility for a faster time to market. These are the four pillars of our overall communications product strategy. In this industry, it's been a long journey.
If you look at where we have innovated, and we have acquired and added some market-leading companies for the last eight, nine years, starting with CRM in telecommunications, IP billing and rating in communications from Portal provisioning, and order management from MetaSolv, Telecom's application server, the app server from BEA. From Sun, we have network compliance and carrier-grade net certified hardware. Our two most recent additions are market-leading products from Acme in session delivery networks and Tekelec in network signaling. You see these are some of the market-leading products that we have brought on board and significantly increased our investment in building and enhancing these products and the domain expertise. If you look at the next slide, this gives you an idea of our industry portfolio. I talked about complete and open and integrated. We have our systems and technology from the larger organization.
My business unit focuses on the middle three layers that you see here. The business operations and support functions, that is all the way from service design and fulfillment, managing network resources, pricing, charging and policy, to billing and subscriber data management. We have a strong service delivery platform, which helps operators create the service, execute it, and we also have, which primarily we only sell white branded, i.e. the service providers provide these, is a large email, IM, chat, calendaring with 200-plus million subscribers worldwide using it through our service provider customers. Our two recent additions give us a very strong footprint in the session delivery infrastructure, in session border control, in core signaling, whether it's SS7 or Diameter, and session recording.
That is our current portfolio, which we continue to invest in and sell and deliver on a global basis to tier 1, tier 2, and tier 3 operators worldwide. If you look at how are we now helping our customers enable the end-to-end customer interaction from the front office. Oracle is the only company that provides technology that spans the entire customer experience from the front office to the back office and into the core network. Working across all these customer channels, whether it's through web or through retail. Telecom companies and service providers in the world are some of the largest retailers, and the complexity of that retail solution for them has dramatically increased because of smart devices and tablets, and we have a market-leading retail solution. The customer is interacting through contact center or through different channels and partners.
We look at this entire life cycle of managing orders, activating services, and then providing charging and billing. This is how we help our customers, service providers to control and provide better customer usage and experience all along, monetizing these personalized services. Now, as we see, there is going to be a 4G and LTE is real. It is going to happen. It is happening in certain parts of the world. To help really generate the key here for us, our focus is how can we work with our operators as they roll out 4G LTE to provide incremental revenue with new offerings, whether it's video voicemail or location-based services, mobile health and wellness. This is a unique opportunity for us, and many of the services are simply not possible today, or they cannot be delivered.
If they are delivered, the ways to monetize them are extremely challenging. This is where Oracle brings in a set of solutions to help monetize 4G and LTE investments to the service providers. Now, a lot has been written about big data on the IT side, if you look at now we can work with our service providers and really provide, if you look at the big data solutions, we can now have data that's from customers, from products, from usage, from service, and now from the network. We can bring all that together in an industry-standard data model and provide scale and address complexity for our customers and give them the ability to leverage big data technologies to provide a better customer experience across the entire life cycle.
Lastly, as I said earlier, we do also sell some of our technologies to large enterprises to provide unified communication and collaboration. Both with Acme and the products we have in UCS help our customers deliver secure solution for voice and video at very high quality, also efficient contact centers, really communications enabling business processes and e-commerce. That's a brief introduction to our communications industry strategy, now I'll hand it over to Raimo.
Great. Thank you, Bhaskar.
Sorry, Shauna.
Turn the call over to Raimo for the Q&A portion of the call. Let me remind listeners that you can submit a question at any time by typing a question in the Q&A box that you'll find in the lower part of your screen. Raimo?
Perfect. Hey, thank you, and thanks for having me on the call here today. Bhaskar, let's start actually just to get the audience all on the same level here. Just tell us a little bit about yourself, when you joined Oracle, where you came from. Maybe let's start with that.
Sure. I was at Portal Software, which was a leading IP rating and billing and charging company. I came from there about eight years now. Yes, I'm in my eighth financial year here and started the communications global business unit, that's how I ended up here, Raimo.
Okay, perfect. Just because from an investor perspective, we haven't really talked too much about telco at Oracle so far. Help us understand how big is it and how important is the communications segment for Oracle?
A couple of data points I can share with you. If you look at Oracle's top 20 customers worldwide, I would say close to half of them are telecommunications companies on an annual basis. Just to give you one flavor. The other comment I would make is, to give you a sense of the size of the business, it is material. Also some data points is, prior to the acquisition, if you look at Acme Packet's annualized revenue or Tekelec, that's roughly about $700 million. You put those two together, and add that to our business unit, it's significantly large, and, as an independent unit, we would be one of the largest technology suppliers to the service provider industry.
Wow, that's really interesting. Okay. Thanks for that. I'm trying to go a little bit deeper now into the telco space, and you mentioned the IP network rollout earlier in your presentation as an important driver for the industry. If you look at that, you know that fixed line today is already mostly IP-based, but what are the drivers to go more specifically into the IP-based rollout for mobile networks, and why is that so important for the service providers?
A couple of things. One is, IP is ubiquitous. You can deploy it anywhere. Two, it's very cost effective, and it handles voice, data, and video. Especially as you look at mobile broadband, I think that's another huge area of investment and drive for our service providers. If you look at all these segments, and once you start looking at the B2B side, whether it's machine to machine, whether it's telemedicine, whether it's banking, I think IP networks are much more efficient. The key challenge there is how do you bring reliability and quality of service onto these IP networks? That's where we look at that as a big opportunity for us to differentiate.
Yeah. Okay. You mentioned it already, but can you talk a little bit about the technical challenges just for the audience to understand a little bit better? If I go to an IP-based network, what are the things that kind of are headaches for the operators there?
I mean, security, that's a big headache. Quality of service, because depending on where you're coming from, where you are and what connection you have, last mile connection, security is an issue, quality of service is an issue. You have these things the industry calls signaling storms, where a lot of folks are trying to access voice and data, and there's no way to prioritize it, and it brings the networks down. If you look at many of us have applications, whether it's on our smartphones or tablets, even when we are not using it, these are chatty applications. They are syncing, they're generating signals, and so there's a lot of traffic. The scale is orders of magnitude more in today's network. It's security, it's signaling scale, it's quality of service. When you're doing that, the challenge is how do you optimize?
How do you optimize these networks? Because you can't keep throwing more capital investment on it. That's one of the areas where we strongly believe that more and more and more intelligence is moving towards software and virtualization, and that's our DNA. That fits very well with us as things are moving to more software-based approach to IP networks, and services. How you optimize these. An equally important one, which is where everybody's scratching their heads, is how do you monetize these investments?
How do you charge for, what kind of policies you put out there so that if somebody wants to download a movie or somebody's doing a very specific video chat with their pharmacist, for that 10, 15, 20 minutes, can they get a burst capacity and pay $5 more, get a higher capacity, high reliability, HD quality, then go back to the normal service? How do you create those policies? How do you charge for those things? These are extremely challenging right now, that's why service providers are looking at innovative solutions, and you can't do that in the traditional old telephony network.
Yeah. Okay, perfect. Talk a little bit about how from an Oracle perspective, what exactly are you doing there? Maybe kind of fit Acme Packet in there as well just to help us understand. I can see the problem, but how is Oracle helping with the solution?
Yeah. I mean, it's been a long journey. If you think about when our BSS solutions were all originally written, and we have patents on it for IP rating and billing. We were a little early in the market. We knew the world would go IP. We were a little early. In the IP world, you want to be both network agnostic because you don't know what kinds of networks it'll run on, whether it's cable, whether it's wireline, broadband, satellite. You have to be network agnostic, and also you don't know what applications will run on it. We have that set of solutions. We also have IP-based activation, network and inventory control, and order management. This order management is a significant problem for service providers, is you get an order, anybody, and let me use a consumer example.
You order a phone or you order a cable TV that has many, many parts in it, all the way from the device to activating it, turning on the services, and getting the right price plans and charging it. We have an OSS service fulfillment portfolio. That is again an IP-based solution for us. If you look at the telecom app server, it's the ability for service providers to have their networks securely built so that they can open it up for third-party applications and have apps developers. That's another IP-based technology. Comes Acme, which brings us into session border controller and IMS, and session routing. As folks are deploying SIP trunks, and moving their traffic, at every edge and at every connection point, you need a session border controller. That's where Acme comes into play.
Okay. If I summarize it, basically the network of the future is going to be IP-based, and while the old guys were circuit-based and computed, like if you look at your portfolio, you basically focus on IP, i.e., on the future all the time. Is that the right way to describe it?
Yeah, I would say, Shauna, it's not a future, it's already here.
Yeah.
Many operators around the world are already deploying and moving their existing traffic and subscribers and services onto an IP network. It's happening at a different pace in the countries, but it's already happening.
Okay.
Right?
Yeah.
It's already happening. That doesn't mean that the traditional SS7 signaling market is going away. The 2G, 3G networks will be there for a very long time. Right?
Okay. Yeah.
The 2G, 3G networks will be there for a long time. 4G is coming. That's where with Tekelec, we have an SS7 signaling solution that serves these 2G, 3G markets, whether it's local number portability, whether it's EIR. We have those set of services also.
Okay, perfect. Is that kind of also because as people do the work there, that's kind of your entry ticket? Like you have the basics, and if they move on to IT, you're there.
We bring a unique combination of the telecom network domain and the IP software domain. Therefore, we can work with the service providers in helping them and working with them, designing and migrating their networks. Folks are not going to rip out existing infrastructure overnight. It's a gradual change, and there will still be usage for the traditional networks. We work with them because we are incumbent in many places. As they are transforming, we look to be a clear partner for transformation.
All right. Okay, perfect. If you look at the journey and me, German, trying to be a baseball guy now, where are we in terms of innings, in terms of the adoption here?
I think we are in the early innings right now. We're in the very early innings. Very early innings. Yeah?
Yeah.
The game is definitely being played in every part of the world. It's just at a different stage. See, if you think about it, the last decade was all about the growth was all subscriber-driven around the world. More and more subscribers were coming onto the network. I think now, barring a few places in the world, the subscriber growth has pretty much flattened out. Everybody who can get a phone or can get a smartphone already has one now. That subscriber-driven growth that drove the industry for the last 10 years or so, I think that's passed now. Right? Now it's all about, okay, how do I make sure I provide But at the same time, the services and the explosion of data on these networks is increasing. How do you monetize that? How do you optimize that?
How do you leverage commercial off-the-shelf hardware, not get locked into custom-built hardware? How do you do this in software so that you can transition change much quickly? That's what we see as a huge opportunity moving forward.
Okay, perfect. If I'm playing devil's advocate for one second, when Acme Packet was still a standalone, an independent company, that was kind of the dream always that we had to build out of the IP 4G mobile networks, and they will be a main player there. Actually, the network builder was always a little bit slower than people were hoping for. What do you see in terms of what the operators are doing at the moment and in terms of speed of adoption? I think U.S. is running ahead of Europe, but what's your thinking around that here?
I think these networks are getting rolled out. I think the adoption of IP-based networks is not an Acme Packet issue. It's a capital-intensive effort. Depending on the operators, you're seeing a lot of progress in North America. You're seeing a lot of progress in Korea and in some places like Japan. I think some of the economic situations are slowing down some of the investments in some other parts of the world, you will see that happening everywhere.
Okay, perfect.
I think in the next 10 years, I definitely see that this will happen. It is just a question of, we do see operators around the world working with us on 4G and LTE and IP deployments.
Okay. Actually it's much better fitted in as part of Oracle because you know what's coming. It's just a question of when, then.
Yeah. I think this is where we are today, working with our customers, in many cases, in production, and in some cases, in their labs and trying to test their systems out. Yeah, we are engaged in, I would say close to 100-plus operators around the world on this.
Okay, perfect. One of the things in preparation for the call that we talked to a decent amount of operators here, and one of the things that they mentioned as part of the IP-based network rollout, network intelligence seems to be the buzzword that comes up all of the time there. Can you talk a little bit about towards that theme of what you see from the service provider level in terms around that subject? What are they thinking there?
Yeah. In fact, we have a network intelligence solution that's almost four-plus years old now. We, a couple of years ago, released what is called an Oracle Communications Data Model. It's an industry-compliant model which brings in Because if you think about it right now, one of the challenges many operators have, it's either happening after the fact in a data warehousing kind of aspect. When they're talking about network intelligence, that network intelligence has to connect with customer data, with product data, with service data, to provide better customer experiences. I think it's not just intelligence in the network, it's intelligence across the board. That's where we have a strong set of analytics and BI tools, and solutions for our customers.
Especially when we combine that with our Oracle Exalytics platform, I think the ability to bring intelligence at the moment of truth is here.
Yeah. That was one of the feedbacks where a lot of the guys mentioned that you guys were like, you have all the assets there, you could be, or you will probably be a very, very big player in this space, yeah.
Yeah. If you think about it, I think also, when you talk about network intelligence or intelligence in the service provider environment, I think today, one of the biggest challenges that everybody's focused on is to help optimize their networks. How do you reduce your cost and improve service? I think that's the first step of intelligence being used. The second step is coming in many places, is now with this intelligence, how can I monetize it? Location-based services. How can I monetize? That's where the intelligence comes into play and the intelligence is already there. The data is there in the networks and in the billing systems, and in the customer care system. How do you bring it all together to make meaningful decisions in real time? That's where we come in.
Okay, perfect. Next question is, how far could you drive that? On the one hand, you could do the network intelligence. You obviously also have billings out there. That's almost the next leg of the story. If you combine the customization for the client, also link that up with billings. Is that kind of an angle or am I driving it too far now?
No, you're spot on. That's why I always differentiate using intelligence. There are two sides to that coin. One side is optimization, and the other side is monetization. When you start getting into monetization, you have to have the ability to connect this intelligence to billing, rating, charging. That's where we have those solutions from Tekelec. We get policy. Now you can monetize based on policies. Right?
Yeah.
Policies are like business rules. Today, many of them are using policy to optimize network traffic and how do you do that. The next generation of that has already started, is now how do I monetize based on policy? Think about toll lanes. For a specific reason, or if you are doing a telemedicine or if you're doing a remote class for an hour, you want a better quality, but you don't want to pay for that 24 hours a day. You just want it for that 1 hour. That's monetization. Therefore, you have to connect with billing and rating and charging. It's a natural thing that we bring to the table.
What does it mean? If I look at the moment, if I think about billings, I'm thinking the big heavyweight, I'll call it legacy now, I'm sorry for saying that, like Amdocs or something like that. They're living in the old world. What does this new world mean for the whole billings industry?
I think, first of all, it's real time, right? It's all real time. It has to be able to provide its convergence, i.e., we always find it interesting, people say, "I have a cable billing solution," or, "I have a wireless billing solution or an IP billing." Our solution is service-agnostic and network-agnostic. Okay?
The second biggest differentiator for us compared to the others is ours is a product-based approach. It's all about configuration and flexibility. If you want to give you an example, there was a time where many governments passed regulations that instead of minute rounding, you have to round to seconds. Okay?
Your usage has to be rounded to seconds. The traditional legacy players, you had to go and code that. It took months and $ millions to do it. In our systems, it's a flag. Right?
Yeah.
As you move more and more towards product and software, and configuration rather than customization, I think time to market and cost are the two key things. That's the key thing for us.
Yeah. Okay. If I think about, going back to network intelligence, because that seems to be a key theme here. Who would be other players then? When I start looking and thinking, you could think about the hardware guys like an Ericsson, but that's kind of, you need to be all out then. Who would be players in this space then?
We do see certain categories. In certain places you will see, but I think today, we believe we have a strong portfolio where we can connect all elements for a customer experience, whether it's regardless of channel, whether it's web, retail, contact center, products, services, and now with the network data. I think we may see individual solutions, but I think we strongly believe we bring both the front office, back office, and the network data into the solution. Let me give you an example. If you think about it, you must be on some plan. Let's say you are on some data plan, and you keep hearing about these bill shock that happens for everyone as you travel around the world. Let's say you're going to Hong Kong on business, and you're going to roam there.
As soon as you land at the airport and turn your phone on, how about the operator with whom you have. Let's say you're using an operator here in the U.S., they have a roaming relationship or a relationship with somebody in Hong Kong. You turn the phone on or your tablet on, it quickly realizes you're here and offers you a day pass, unlimited usage day pass just for that in Hong Kong. It goes away. How do you do that? Because of the network. Your home provider already knows where you are, because once you turn your phone on, they know where you are. Right?
Yeah.
How do you help customers do these kinds of things is where the intelligence has to be used, and then connected to policy, and then connected to billing and charging.
It's going to be very difficult for someone that is a hardware-based or whatever to actually do that because this is software, correct?
This is also, as I said to you earlier on, I think, it's all moving very rapidly to software because, and virtualization, it gives the customers the flexibility and choice and also their ability to deploy it in different business models. Many of the operators have their own internal clouds, their own data center clouds, compute and storage clouds. They want to be able to deploy and leverage those things.
Yeah. Interesting. Just driving on here a little bit, if you do that, the amount of data that you create and have to deal with is huge. You touched a little bit on the big data, and then Oracle has obviously dealt with data all their life. Can you just talk a little bit about how that legacy or that heritage of dealing with huge amounts of data is helping you now in the telco space?
Yeah. In fact, that is where, if you think about it, we have a large experience of being the database in the enterprise and in the service provider on the software and IT side. Now, the subscriber data management is something that's very key in the market. We are bringing that kind of scale, availability, and mission-critical aspects of the database that we have over the last many years now toward into the network.
Yeah. Okay, interesting.
The scale is massive. It's not just the number of subscribers, it's number of services, it's number of connections. These data sets are massive.
Yeah.
I think that is where we leverage not only the database technology, but also our Exadata, where we can provide tremendous performance at much lower footprint and cost.
Are we talking like peta? What is it? Like terabyte? Is it petabyte, or how big are these numbers?
These are definitely more than terabytes, and in some cases, these are petabytes.
Yeah. Wow, okay. That is big. Yeah.
Just think about the number of subscribers, also we are at the beginning stages. Think about this. Today, because today most of this is happening in a person-to-person interaction as our person-to-device interaction. Once this device-to-device interaction starts and picks up, just look at. Take an example. You and your family, you may have a couple of phones, couple of tablets, but then look around your house. There are many devices around your house, whether it's security, whether it's home appliances, whether it's. For example, one of the industries that we have had some success in is in telematics. That machine-to-machine communication from your car for security services, for location-based service. When you start seeing that, I think the data set grows exponentially.
You didn't use the buzzword then, but the Internet of Things.
Yeah.
Yeah.
There are many words over there, but if you look at it, whether it's machine to machine, whether it's device to device, whether it's Internet of Things. If I look at it, all these things have to be activated. All these devices have to communicate, and that communication has to be done securely in a quality way, and your ability to bill and charge for those things. It's something that we think we are in a very good position to work with our customers in that.
Okay, perfect. Let's shift gear and move to the larger portfolio a little bit here. If I look at one of your last slides where you showed your whole comprehensive portfolio, it is very comprehensive at this point, but help us to understand how it all interacts. If you think starting with the front end, going to the session control. Then also the other question I have with that is, how do you get that across in a client conversation because you're very broad, but you're almost too broad for a single point of contact?
I think you're right. We have a large portfolio, and I think it's like our customers expect. A single point of contact is something that they want from a relationship and a procurement point of view, but they do want to interact with product experts and domain experts of these things. You cannot be a generalist in this space. Right?
Yeah.
We do have teams that exclusively focus on whether it's retail or web. We have teams that focus exclusively on, whether it's, now with Acme, on IMS and session delivery networks, or with Tekelec on SS7 or Diameter or policy or SDN. Also, in the customer base, it's not one person. There's no one buyer because you have CTO organizations, you have CIO organizations, you have chief marketing officers, you have chief financial officers. These companies themselves are very large, and their business needs and the language that's spoken in these teams is very different.
Yeah. Okay.
Yeah. What we do is we have an ability to work with these teams, it's a journey. We do our best in coordinating all of that, in a fashion that for the customer and the buying cycle, it all can come together.
Okay, perfect. There, I just link in one of the questions I just got from the webcast here, that's, as you go deeper into telco space, the buying center is changing somewhat. If you look at Oracle enterprise sales to the CIO, now it's more the CTO who thinks much more differently about complexity and things like that. How do you adjust that from a go-to-market perspective?
Sure. If you look at, in the communications business unit, I have a large sales force that has been selling to both the network side and to the IT side for quite some time. Right? Now we've added more capabilities, with Tekelec and Acme. When we add these teams, we continue to invest in sales, the domain, and also in engineering. We have those relationships both at the CIO level and also at the CTO level, and we continue to invest in those things.
Okay.
Our model is not we build all these products and throw all of that onto one guy's bag who's been calling onto the CIO for the last 10 years. Right?
Yeah.
We have experts who call into the CFO, and we have experts who call into the CTO organization. Now with Acme and Tekelec, we've added tremendously good capacity, and we will be investing more and expanding that reach on a global basis.
That is one of the things that we do is, any of us, even I myself, we all came from smaller companies. Our capacity to go to market across the world is limited because of the cost it takes. With Oracle, we have the ability, I can hire If I need to go after an operator in Nigeria, Oracle already has an office there. All I have to do is go and find the best telecom domain people there and hire them.
Yeah. Okay. Yeah. That's noted.
I have the infrastructure to service the customer there. I have infrastructure on a global basis to provide support. That's the key thing is can I support these customers 24/7 at their sites or remotely? That's something that we have a large support organization that we can tap into.
Yeah. Okay. Another question from the webcast was like, how do you think about the traditional players in this market, like Ericsson, Nokia, Siemens, Alcatel-Lucent, as Oracle pushes more like a software solution into the market?
Yeah. I think the world is changing. It's a transformation that's happening, and I think as service providers are dramatically transforming themselves, I think if you look at the names of the companies you mentioned, I think radio access is a big part of their business. Then some of them also do build operate networks, so managed service is a very big part of their business. We are not in those spaces at all today.
We focus on the portfolio that I talked about. With some of them, we partner sometimes, and they're also trying to transform themselves. I think, we come from a very different point. We're coming from software for the last 35 years, and the world is moving, and the network is moving to the software.
Yeah. Okay. I've got one last question I wanted to ask you that came from the webcast here. I think it's a very important one, is, like, can you talk a little bit about how the types of solution you offer for the OTT players, like if you think about an Apple iCloud or something like that?
Many of the over-the-top players, even if they don't own the network, they still have the very same challenges. We do have a lot of over-the-top players with whom we work on either a unified communications, email, IM, chat, or when they are rolling out these services, they have to provision the service, they have to monitor the usage of the service, and then they have to bill for the service. Right?
Just because they don't own the network, that doesn't mean that they don't have the same problems. They also have a scale issue. They also want to be able to reach customers anywhere in the world. Right?
Yeah.
We work with many over-the-top players and many players who are taking their assets and digitizing it and moving on to the web. We work with them. We have a business group here which focuses on what we call nationals or enterprises, because these companies, because there are many of them and many industries, we have a generic term enterprise for it. Also now with Acme, it helps us, because they're also providing solutions to these enterprises. Yeah, they all have the same problem, even if they don't own the network.
Okay, perfect. In summary, I have to say what I've learned from the call now, it's a much bigger unit than I ever thought, and the world is coming towards you in terms of the software. We're moving towards software here.
Yeah. I think we are playing a catalyst. That's, again, given our investments, and we are also being a catalyst in driving that change, working with our service providers. There are very innovative providers around the world who are doing very innovative things and moving rapidly. I would agree with you. It is going software route, and that's our DNA.
Perfect. Okay. With that, I don't have any questions more. I might want to hand it back to Shauna now. Thanks for having me, and I really enjoyed our conversation, Bhaskar.
Thank you, Raimo.
To wrap up, I'd like to thank you for joining us today. I'd also like to extend a very special thank you to Raimo for moderating the Q&A portion of today's call and asking questions most asked by investors. If you have any follow-up questions, please contact the investor relations team here at Oracle. This concludes our call.
Ladies and gentlemen, that does conclude the conference for today. Again, thank you for your participation. You may all disconnect. Have a good day.