|Exam Name||:||IBM Commerce Solutions Selling/Order Mgmt Sales Mastery Test v1|
|Questions and Answers||:||37 Q & A|
|Updated On||:||February 22, 2019|
|PDF Download Mirror||:||Pass4sure 00M-238 Dump|
|Get Full Version||:||Pass4sure 00M-238 Full Version|
00M-238 exam Dumps Source : IBM Commerce Solutions Selling/Order Mgmt Sales Mastery Test v1
Test Code : 00M-238
Test Name : IBM Commerce Solutions Selling/Order Mgmt Sales Mastery Test v1
Vendor Name : IBM
Q&A : 37 Real Questions
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Perficient, Inc. PRFT, +0.94% (“Perficient”), a leading digital transformation consulting company serving international 2000® and different giant commercial enterprise purchasers all the way through North america, introduced it has been named IBM’s 2019 Watson Commerce business accomplice of the yr. The IBM Excellence Award, announced during IBM’s PartnerWorld at consider 2019, recognizes Perficient’s ongoing growth and relationships with key valued clientele, and idea management around the IBM Watson consumer Engagement Commerce platform as an crucial component for digital transformation.
“Our approach to commerce is focused on crafting a adventure, connecting with customers, and providing a seamless customer experience throughout channels and during the enterprise, imperatives in nowadays’s consumer-pushed world,” spoke of Steve Gatto, national revenue director, Commerce options, Perficient Digital. “together, with our shoppers, we’re reworking companies in a means that not most effective drives growth however strengthens their typical manufacturer, and we continually evolve our choices to keep consumers on the true of their game. We’re honored to be diagnosed by IBM, and we’re anticipating sharing our imaginative solutions right through IBM think 2019.”
Perficient Digital Takes Commerce solutions beyond Transactions to seriously change the client Lifecycle for a global different manufacturer
With branded manufacturers and distributors beneath drive from the dramatic shift to on-line deciding to buy, a worldwide assorted manufacturer sought to digitally radically change its commerce enterprise. In partnership with Perficient Digital, the two organisations delivered optimized client earnings, updated product assistance (PIM), and streamlined the ordering method through construction of a B2B portal. With the implementation of IBM’s Sterling Order administration gadget (OMS), and Perficient’s advantage, the diversified manufacturer is future-proofing its business to align with business developments and market alternatives.
furthermore, the company’s OMS will supply them greater flexibility in managing advanced order management scenarios, improved reliability so as processing and fulfilment, and a cost reduction in implementing throughout its commercial enterprise. it's going to additional allow the firm to bring service enhancements to its customers, optimize its pricing, promotion and normal give chain, boost revenue due to better stock visibility, and cut back expenses through better efficiencies in order visibility.
Perficient Digital Enhances the on-line client experience for a number one material Retailer
In a market that has historically depended on brick-and-mortar experiences, a number one cloth and craft retailer become challenged with extending the customer experience online. Perficient partnered with the business to put into effect an IBM Watson Commerce answer that supplied up-to-date visibility of its inventory and more suitable monitoring of its product volume, region, and availability. using IBM Order administration, Perficient extra more desirable the solution via cloud migration that offers a single view of provide and demand, orchestrates order success approaches throughout buy on-line Pickup In keep (BOPIS) and Ship-from-store (SFS), and empowers enterprise representatives to improved serve customers each in call facilities and in-keep engagements.
“Perficient has been deploying IBM Commerce options for practically two decades, presenting conclusion-to-end digital commerce solutions that encompass assorted channels, and deliver seamless and efficient experiences throughout their total enterprise,” said Sameer Peera, universal supervisor, Perficient’s commerce follow. “With the recent news that HCL took over building of IBM WebSphere Portal, IBM internet content material management and internet experience factory, our shoppers continue to interact us for aid with their digital commerce options. We’re comfortable to be their go-to associate as they navigate the altering market landscape and carry for their valued clientele.”
Perficient competencies in action at IBM consider 2019
apart from its award-winning commerce solution knowledge, Perficient experts are available during the IBM feel 2019 conference in booth #320 to talk about its journey and potential throughout the IBM portfolio , particularly cloud, cognitive, data, analytics, DevOps, IoT, content administration, BPM, connectivity, commerce, mobile, and client engagement.
while IBM has introduced its plans to promote its commerce portfolio, the information of its acquisition of crimson Hat additionally signaled the criticality cloud building and start play in successful conclusion-to-end digital transformations. As an IBM international Elite accomplice, one in all most effective seven companions with that popularity globally, and a red Hat Premier accomplice, Perficient is well placed to work with both groups via this transition. And, our experts will be accessible all the way through IBM feel to focus on a way to navigate the cloud market, share key customer success reports, and supply strategic advantage on the opportunities forward for purchasers.
“expertise is changing so all of a sudden, and organizations should hold pace or face disruption,” mentioned Hari Madamalla, vice chairman, emerging options, Perficient. “With talents and journey in all points of the commerce event, to main cloud, internet hosting, managed functions and aid solutions, enterprises flip to Perficient as a go-to companion for his or her digital transformations.”
be a part of a couple of Perficient discipline rely specialists and our consumers as they current during six IBM consider classes, including:
As a Platinum IBM enterprise partner, Perficient holds more than 30 awards throughout its 20-12 months partnership history. The company is an award-successful, certified utility price Plus solution company and some of the few companions to get hold of dozens of IBM professional level application competency achievements.
For updates throughout the adventure and after, join with Perficient specialists on-line with the aid of viewingPerficient and Perficient Digital’s blogs, or comply with us on Twitter@Perficient and @PRFTDigital.
Perficient is the main digital transformation consulting company serving international 2000® and business shoppers throughout North america. With unparalleled assistance expertise, management consulting, and creative capabilities, Perficient and its Perficient Digital agency convey imaginative and prescient, execution, and price with astonishing digital event, business optimization, and trade options. Our work makes it possible for purchasers to enhance productiveness and competitiveness; develop and make stronger relationships with consumers, suppliers, and companions; and cut back expenses. Perficient's experts serve purchasers from a network of places of work throughout North america and offshore places in India and China. Traded on the Nasdaq global select Market, Perficient is a member of the Russell 2000 index and the S&P SmallCap 600 index. Perficient is an award-winning Adobe Premier companion, Platinum stage IBM enterprise partner, a Microsoft countrywide carrier provider and Gold CertifiedPartner, an Oracle Platinum accomplice, an advanced Pivotal in a position companion, a Gold Salesforce Consulting partner, and a Sitecore Platinum companion. For greater tips, visitwww.perficient.com.
secure Harbor statement
one of the statements contained in this news unencumber that are not merely ancient statements focus on future expectations or state different ahead-looking suggestions regarding fiscal consequences and enterprise outlook for 2018. those statements are subject to usual and unknown risks, uncertainties, and different elements that may trigger the exact consequences to differ materially from those pondered by means of the statements. The forward-looking tips is in accordance with administration’s existing intent, perception, expectations, estimates, and projections related to our company and our trade. be sure you be aware that those statements simplest reflect our predictions. specific movements or effects may additionally fluctuate noticeably. crucial elements that might trigger our specific effects to be materially diverse from the ahead-searching statements include (but aren't confined to) these disclosed beneath the heading “chance components” in our annual record on kind 10-okay for the 12 months ended December 31, 2017.
View source edition on businesswire.com: https://www.businesswire.com/information/domestic/20190212005973/en/
source: Perficient, Inc.
Ann Higby, PR manager, Perficient, email@example.com
Copyright enterprise Wire 2019
this might encompass IBM Watson Order management and Commerce for seamless digital engagement. Working with IBM business companion CEBS international, IBM solutions will now not only help force superior client experiences and new stages of convenience but carry efficiencies to the deliver chain.
With a countrywide footprint of 350 physical showrooms, an expanding brand portfolio and altering client preferences, Metro footwear Ltd become facing challenges in managing orders coming from numerous on-line structures.
prior it had unreliable utility that led to lack of visibility of precise-time data of sales, stock region and returns together with inventory management challenges. Metro shoes Ltd crucial to enhance online presence for some of their generic inside manufacturers which were getting low visibility impacting usual sales."technology is redefining consumer engagement and should be the important thing differentiator for retail manufacturers of the future. We’re excited to collaborate with IBM and CEBS to embark on our digital transformation experience,” spoke of Alisha Malik, vice chairman, Digital, Metro shoes.
“With IBM’s competencies in the omni-channel commerce and retail area, we're confident that these changes will now not best aid accelerate the execution of our strategy, however also provide us an aspect over competitors. At Metro shoes, we strongly consider that the brand new answer will increase the usual consumer experience, thereby expanding revisits, traffic and loyalty,” brought Malik.
With IBM, Metro footwear Ltd can gain new levels of customer perception, which may also be used to customize the online event for every of the web page. company will capable of exhibit all of its manufacturers and suggest specific gadgets in line with insights shared by using valued clientele on a single platform.
This personalised journey will consist of new and handy fulfillment alternatives corresponding to buy online, decide upon up in keep, reserve in save and simple returns. on account of these new capabilities, Metro footwear could be able to elevate each and every traveler’s experience on the website by means of enabling commerce practitioners with cognitive tools which aid them deliver omni-channel experiences that interact consumers and force sales.
With IBM’s expertise capabilities and CEBS expertise with marketplace integration, Metro footwear as a company/vendor will also be capable of combine with more than 14 e-marketplaces like Amazon, Flipkart and different leading portals with a centralized technique and inventory engine to enable Metro to scale up to the wants of a transforming into industry company. additional, IBM Cloud will aid raise the means to configure heavy workloads and thereby convey performance required for height utilization all the way through the searching season.
Nishant Kalra, business unit chief – IBM Watson consumer Engagement - India/South Asia delivered, “IBM is at the forefront of assisting purchasers embody more moderen the way to work and digitally reworking the style they have interaction with their end customers. we are happy to be a part of Metro shoes’ digital transformation event by means of delivering superior digital commerce event, leveraging the stores by merging them with on-line, and finally using brand advocacy. IBM in association with CEBS will allow deep innovation, faster-go-to-market and streamline methods for scalability.”
The IBM platform will create a bridge between its on-line and offline company which the retailer prior to now lacked. With the brand new integrated single view, Metro shoes sooner or later can be capable of use insights received from the digital realm to design particular providing for customers as they stroll into any of their shops. subsequently, they could bear in mind what shoppers need, make certain availability when and where they need it and even look at move selling and upselling across their a variety of manufacturers.
For Metro footwear, IBM Watson Order administration and Commerce options can pave means for IBM’s cognitive technologies to bring insights that help them provide customers with customized concepts and an more desirable consumer journey –from click to start.
“With over 15 years of experience in developing e-enterprise tools, CEBS has been a trusted options issuer and accomplice for corporations throughout the globe,” mentioned Satish Swaroop, President, CEBS global. Our useful and versatile utility options paired with IBM’s deep know-how skills will supply Metro shoes a true-time, centralized gadget for customer management.”
aspect Roberts, WA and Vancouver, BC - February 14, 2019 (Investorideas.com Newswire) Investorideas.com (www.investorideas.com), a global investor information source masking synthetic Intelligence (AI) brings you modern day version of The AI Eye - watching stock information, deal tracker and advancements in artificial intelligence.
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The #AI Eye: IBM ( $IBM) to make investments $50 Million in analysis With hospital and medical middle and Qualcomm ($QCOM)
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modern-day Column - The AI Eye - observing inventory news, deal tracker and advancements in artificial intelligenceworld AI Chipset Market to approach $13.four Billion USD with the aid of 2023
intellect Commerce has posted new analysis via In For increase, indicating that the world AI chipset market will method $13.4 billion USD by way of 2023, with the USA generating over $3.5 billion. An excerpt from the record summary reads:
The AI chipset industry is poised to radically change the whole embedded system ecosystem with a mess of AI capabilities corresponding to deep desktop getting to know, image detection, and many others. this will also be transformational for current critical company capabilities comparable to identity administration, authentication, and cybersecurity.
Multi-processor AI chipsets be trained from the environment, clients, and machines to find hidden pattern among statistics, predict actionable insight, and operate moves in keeping with particular cases. AI chipsets will become a vital part of each AI utility/systems in addition to critical help of any data-intensive operation as they vastly enrich processing for numerous functions as well as increase usual computing performance.IBM to invest $50 Million in research With health facility and clinical center and Qualcomm, Accenture and Kellogg team to develop VR Merchandising solution shares discussed: (NYSE:IBM) (NasdaqGS:QCOM) (NYSE:ACN) (NYSE:okay)
IBM, (NYSE:IBM) via Watson health, plans to invest $50 million in analysis collaborations with Brigham and girls's hospital, a teaching health center of Harvard clinical school, and Vanderbilt university clinical center - to enhance the science of artificial intelligence (AI) and its utility to fundamental public fitness concerns. Work with both associations will concentrate on developing solutions to fitness concerns premier perfect for AI. Kyu Rhee, M.D., M.P.P., vp and chief health officer at IBM Watson health, commented:
"building on the MIT-IBM Watson Lab introduced ultimate yr, this collaboration will consist of contributions from IBM Watson fitness's long-standing dedication to scientific analysis and our perception that working in conjunction with the world's main institutions is the quickest course to increase, strengthen, and understand functional solutions that remedy one of the crucial world's greatest health challenges."
QUALCOMM included (NasdaqGS:QCOM) subsidiary Qualcomm applied sciences, Accenture (NYSE:ACN) and Kellogg enterprise (NYSE:okay) are collaborating to increase and pilot a digital truth merchandise answer. The VR merchandising answer utilizes a Qualcomm VR reference design headset, powered with the aid of Qualcomm Snapdragon 845 cellular VR Platform and is developed by using the Accenture prolonged truth (XR) observe. trying out become accomplished in collaboration with Kellogg across the launch of their Pop muffins Bites product. Raffaella camera, world head, Innovation & Market method, Accenture prolonged fact, defined the tech:
"Our VR merchandising answer has the knowledge to transform product placement by way of examining buyer purchasing conduct in a holistic approach. through combining the energy of VR with eye-monitoring and analytics capabilities, it makes it possible for gigantic new insights to be captured while buyers store by means of monitoring where and the way they consider all items across a whole shelf or aisle. ultimately, this makes it possible for product placement choices to be made that can positively impact total manufacturer sales, versus best single product income."
Sam Mowers, Investorideas.com
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With today's global and distributed commerce, organizations of all sizes are having to collaborate and exchange information with a growing ecosystem of divisions, partners and customers. Most companies want to communicate electronically and in real time, but beyond email, managing the exchange of data, messages and documents can be challenging and expensive.
Traditional EDI, networks or point-to-point integration systems are not providing the interoperability, agility and real-time information exchange businesses need to compete. In addition, companies need to do more than merely exchange data; they need to integrate complete business processes, such as procurement, supply chain management, eCommerce, benefit claims processing, or logistics, to name just a few.
As with other technologies, integration solutions are moving to the cloud in order to provide this increased flexibility and complexity. Today, there are an increasing number of technology vendors giving customers a choice of traditional on-premise integration - where the company manages the connections, mapping and business processes itself - or cloud-based products with strong self-service or managed service support.
While the cloud may not be appropriate for every company or solution, it is an ideal platform for integration, as it enables seamless interaction and collaboration across communities and systems. From clear economic benefits to increased IT agility to real business impact, a cloud-based integration solution brings value across the IT and business aspects of the organization. Below we've outlined the top 10 IT and business benefits of conducting multi-enterprise integration in the cloud.
Let's look at each of these in a bit more detail with real-world examples.
1. Improved partner and customer relations and retentionCompanies must make it easy to do business with them - it's no longer realistic to tell suppliers to adhere to a single format, such as EDI, as companies have investments in applications and systems they need to extend. Plus customers have more choices than ever before, so if you make it hard for a customer (or partner) to exchange information with you, they will go to a competitor.
A great example of this is a mid-sized electrical supply distributor, Mayer Electric Supply. An increasing amount of its business was being conducted online, but its eCommerce site and related processes were not keeping pace with customer demands, many of whom were large multinational organizations. Mayer chose to bring its online catalog in-house, having its internal IT team rework the catalog and manage the system, but it turned to a cloud-based integration platform to manage the eCommerce "punchout" and integrated purchase order exchange. This enabled all customers to shop with Mayer directly from their existing procurement systems and incorporate the process into its overall procurement work flow. The result for Mayer was improved customer retention and increased order size.
2. Increased revenue and marginOne of the greatest growth areas for cloud-based integration is in demand chain processes, because companies realize that keeping customers close and improving customer-facing business processes has a direct impact on the top and bottom line. With the companies we've surveyed, all of them have experienced improved metrics around retention, order size, revenue and margin.
Take, for example, Invitrogen (now Life Technologies Corp.), a $3 billion per-year supplier to the global life sciences community. The company wanted to improve its customers' online business experience to increase revenues. By leveraging a cloud-based integration solution, Invitrogen was able to accept transactions from diverse customer procurement systems via its website and rationalize an order management system that encompassed more than a dozen platforms. Invitrogen saw orders rise 29 percent after an account was integrated.
3. Improved order accuracyOver the last decade, we have seen a significant increase in demand for integrating eCommerce and procurement processes. These include procure-to-pay, order-to-cash and "punchout." By using a cloud-based integration solution, the experience to integrate these processes is seamless for customers and suppliers. One key benefit of this, as mentioned above, is increased revenue, but there is also a secondary benefit around order accuracy. One eCommerce company saw order accuracy improve to 99% after implementing a cloud-based integration process with its customers, improving inventory management and delivery times, and removing manual intervention from the process.
4. Faster time-to-marketAcross industries and markets, there is an increasing customer force around the "power of now. Customers want to receive products and services more quickly and with less effort. This is somewhat related to the overall trend around the consumerization of business technology, as business people want the same experience at work that they receive shopping or researching online at home. This requires significant improvements in business agility and in the ability to deliver products more efficiently to meet fast-moving markets. To achieve this, companies must work more closely than ever with suppliers, distributors, retailers and partners.
Cloud-based business integration enables real-time collaboration and the exchange of information surrounding logistics, parts, designs, inventory, customer order trends, procurement and other critical processes. Being able to receive messages in a matter of hours versus days or weeks can make the difference between getting the deal or not.
5. Greater competitive advantageThe ease of cloud-based integration can also help companies win new customers and boost market share, enabling small to mid-sized businesses to compete directly with much larger players. In addition, integration can ensure that companies can seamlessly work with customers and partners by not requiring that all business processes occur in a particular format, which may not be compatible with the format that the customer or partner is using.
For example, Office Depot turned a shortcoming that kept it from fulfilling portions of orders from customers into a competitive advantage. By moving specific transactions to a cloud-based integration platform, Office Depot was able to seamlessly work with a diverse set of customers using many different procurement systems. The result: A "gain in market share with very little investment."
6. Reduced costs and capital expenditures (CapEx)Traditional integration solutions can be costly, often require a specialized and expensive skill set from workers, and are prone to break at the slightest change in format or schema. Furthermore, IT departments are usually under pressure from the business side to improve IT operations and help drive greater revenue or business impact, but rarely are given the additional resources to do so.
Integrating existing systems through cloud-based integration helps companies avoid or delay the costs of replacing infrastructure. The Software as a Service (SaaS) subscription pricing model allows funds for integration to be moved from the capital budget to the operating budget, making integration easier to fit into the IT budget, and enabling IT to spend capital on other more capex-intensive projects.
7. Increased operational efficienciesSome of the greatest gains in operational efficiency come from transitional manual processes to automated ones. As we know, this also tends to reduce costs and improve accuracy. With cloud-based integration, fewer people need to manage connections and transactions, as it enables frictionless system-to-system business processes automation.
While every IT team needs to show operational improvements, nearly everyone we talk to is worried that cloud or SaaS-based solutions will mean a reduction in IT staff. We have not had one customer experience where this has occurred. On the contrary, what we have seen is IT staff moved to more strategic projects or to working on new innovations to drive business growth.
A great example of this is with the consumer products division of Cisco, which uses cloud-based business integration to help manage and automate key processes across a growing, global distribution network. While the company says the move to the cloud saved it the costs of two full-time staff, the IT team that had previously managed EDI connections and translations were moved to manage partner relationships and strategic projects.
The same is true for Whirlpool Corporation, whose North American CIO emphasizes that IT people are focused on managing strategic relationships and projects, and the company leverages the cloud and technology partners to manage much of its infrastructure and integration requirements.
8. Extended investments in legacy applications and systemsIntegration can extend the life of legacy assets by enabling all members in the integration community to work from existing systems. With cloud-based solutions, there is no "rip and replace" required, and there should be minimal to no software or hardware required behind the firewall. This is a great way to upgrade business processes or improve efficiencies without having to invest heavily in solutions or migrate processes to a new system. This interoperability and extension of systems is a critical reason many companies are turning to cloud-based integration solutions.
9. Aligns IT with business goalsHow many times have IT leaders heard it's all about "business technology" and making sure IT impacts the business? Wouldn't it be nice to find a solution that provides this alignment with little effort? Business integration is one of those areas that is truly a win-win. Oftentimes, it is the line of business that discovers the need for improved integration, such as the logistics, procurement or eCommerce manager, where there is a clear pain and a need to improve processes. By working with the business on integration challenges and using cloud-based solutions to manage it, you can quickly achieve business impact without negatively impacting your IT budget or goals.
10. Easy scalability and flexibilityDuring the recent economic downturn, it was more important than ever for companies to have the option to scale back on IT and in some cases integration costs. With an on-demand integration solution, companies can quickly and easily increase or decrease connections, transactions or the number of companies in their integration community, and then scale back up when business requires it. In addition, one of the greatest benefits of cloud solutions is the ability to start small and expand as needed, when you are ready.
These are some of the top ways companies can see measureable IT and business benefits from a SaaS-based integration solution, many of which are realized in a matter of weeks or months. Integration enables business process automation across the supply chain, demand chain, general operations, procurement, eCommerce and other business areas. A SaaS-based integration solution can also help remove the challenge of traditional business integration methods while delivering substantial business and IT value.
Beyond the transaction, it can provide visibility into business processes, partner operations and customer needs. Benefits are realized across an entire organization, from business units to IT to the CIO, providing predictable costs, greater operational efficiency, higher margins and revenues, and automated business processes. For these reasons and others, business-to-business integration should be a key element of consideration for any company's overall strategy.
There’s a reason Larry Ellison called cloud computing “nonsense” in 2009 and why he still won’t permit Amazon-style metered pricing for Oracle’s mainstream database and middleware. A traditional 11g database license that today costs $2.8 million up front would cost less than $9 per hour using Oracle’s mySQL on Amazon. (Keep reading to see why this apples-to-oranges comparison is valid.)
We’ve seen a similar scenario play out before — back when IBM mainframes ran mission-critical applications on legacy databases. IBM actually pioneered relational databases, but it was conflicted about selling the lower-priced, lower-margin servers needed to run them.Advertisement
These servers had the price-to-performance ratio customers needed for the performance-hungry RDBs. So a new generation of infrastructure vendors — led by DEC, HP, Sun, Microsoft and Oracle — disrupted the old IBM platform. Just like IBM, Oracle has the technical wherewithal to compete with the new databases that are powering cloud-based applications, but they’re conflicted about how to handle metered pricing in these environments.
Metered pricing disrupts old business models
We are in the midst of at least two technology disruptions. But as Clayton Christensen described in “The Innovator’s Dilemma,” disruptions are more often about addressing the needs of “un-served” and “over-served” customers than they are about revolutionary technologies. Web 2.0 apps are a perfect example of customers over-served by Oracle’s enterprise database. During the dot-com bubble, Oracle’s enterprise database ran on big Sun and EMC boxes and powered both Web and SAP-class applications. Since then, however, untold numbers of Web apps moved to the low-end and less expensive mySQL as part of a migration to the LAMP stack.
The second disruption is reaching un-served customers in social media and other new markets who are building big data applications with new levels of data volume, variety and velocity. These customers are often using the SMAQ stack or the still-emerging class of NoSQL or NewSQL databases.
Amazon enabled both of these disruptions by offering two critical features. They enabled on-demand delivery with elastic capacity, using hourly metered pricing and the ability to automate complete control of the remote hardware infrastructure, as Scalr CEO Sebastian Stadil recently explained to me. (Scalr manages applications for thousands of customers on Amazon and other service providers.)
Traditionally, the most challenging disruptive innovations force incumbent vendors to change their business models. Oracle clearly has the technical wherewithal to build databases that meet the needs of Web 2.0 and big data applications. But changing the resources, processes and values that underpin its business model in order to support metered pricing will be immensely challenging.
A closer look at traditional and metered prices
Even if Amazon fully supported a typical Oracle configuration, Oracle’s bread-and-butter enterprise edition database in a two-node cluster with RAC and caching on Amazon’s largest EC2 databases would cost more than $900,000 in upfront licensing fees. But according to Scalr’s data, a typical application runs most of the time at only 40 percent of its peak capacity. Since Oracle requires buying licenses for peak capacity, a $900,000 cluster would be upsized to $2.3 million. With the obligatory pre-payment of 12 months’ maintenance, the initial commitment totals $2.8 million.
Compare that to a baseline cost of $5.20 per hour for the same configuration of mirrored mySQL database servers. Peak demand would top out at $12, but it would hit that only periodically, such as during a holiday shopping surge. Scalr’s data also indicates that when capacity is averaged out between peaks and a 40-percent baseline, it comes out to 60 percent of peak capacity. So with metered pricing, if we start from $12 an hour for peak capacity, that totals an average cost of $8.70 an hour, or $19,000 per quarter or $76,000 per year.
The traditional, upfront model has additional charges. According to Michael Crandell, CEO of RightScale (a company that has launched more than 3.5 million servers for customers on Amazon and other service providers), managing the full application lifecycle may require additional licenses. Server licenses for use in quality assurance, load testing, staging and standbys for failover might not be included in the production license. Add those to the $2.8 million.
How metered pricing disrupts Oracle’s business
The most important number to traditional enterprise software companies is their total revenue during the quarter they make a sale. The bigger that number, the more profitable the company looks after subtracting the heavy, and relatively fixed, upfront expenses for sales and marketing and R&D. Oracle today recognizes immediately $2.3 million after subtracting the 12-month maintenance subscription of $0.5 million from the $2.8 million total.
At the risk of greatly over-simplifying its published income statement, let’s say that Oracle would then subtract one-third, or $750,000-plus, for sales and marketing and R&D. (In reality, the sales and marketing expense for license revenue is actually higher, because follow-on maintenance services take little effort to sell, and dwarf the license revenue). The remaining $1.5 million would be Oracle’s profit margin for the quarterly reporting period when they made the sale. Now subtract that same $750,000 in expenses from the $19,000 in quarterly revenue under metered pricing. That comes to a loss of $730,000 for the quarter in which the sale is made.
In fairness, these metered revenue streams would add up on top of each other. But the point is that the transition to metered pricing would dramatically erode Oracle’s revenue and 45 percent of its operating profit margins. That is why Oracle is resisting metered pricing.
The bottom line
Contrary to Oracle’s claims, neither its Exadata database machine nor its database appliance is a cloud strategy. Both strategies base their pricing on peak capacity, not on elastic metering. Furthermore, discrete hardware is the opposite of cloud infrastructure, which enables near-infinite capacity on demand. Like IBM during the client-server transition, Oracle has the technology to address customer demand. It is just conflicted about the business implications of cloud computing’s metered pricing.
George Gilbert is a co-founder at TechAlpha Partners, a consultancy that works with vendors serving the enterprise market, startups and institutional investors on issues of business strategy and product management and marketing. Previously, Gilbert was the lead enterprise software analyst for Credit Suisse First Boston, a leading investment bank in the technology sector.
Image courtesy of Flickr user stevendepolo.
For more on how big data is impacting the tech industry, be sure to check out GigaOM’s Structure:Data Conference in New York City on March 21 and 22.
Thirty years after he arrived in Canada from India barely able to speak English, serial entrepreneur Naveen Seth traces the roots of his thriving business career to lessons his father taught him when he was a teenager.
Seth, CEO and owner of the rapidly growing La Prep chain of bistro-style restaurants, was 15 years old when he began helping his father out after school at the successful textile company he ran in Punjab, India.
He’d monitor production at the plant and report back to his father on new orders coming in and product that needed to be shipped out. He branched out into other parts of the business — wholesale operations, sales, the retail shop. In the evenings at the family dinner table, Seth’s father would talk about business and encourage him to set priorities and talk about how he should go about making them happen.
“My father was a fantastic teacher,” Seth says. “He always tried to explain how things work in business in a conversational way, rather than by lecturing you. Those lessons are still there in the back of my mind as I run my own companies.”
Seth had to lean on what he’d learned when tragedy struck and his father was killed in a traffic accident. At the age of 21, the job of running the family textile business in the immediate aftermath of his father’s death and then winding it down fell to Seth.
The following year — on April 1, 1988 — he immigrated in Canada, where two of his elder sisters lived, to start a new life in a new country. The day after he arrived in Ottawa, Seth began managing a convenience store his sister owned.
As he crammed to learn English, Seth also studied the convenience store business. It wasn’t the textile industry, but many of the same business principles applied. About half a year after his arrival, Seth bought a failing convenience store for $25,000 and set his sights on turning it around. He made numerous improvements and changes to bring in more customers. Eight months later, he sold the store for four times what he had paid for it.
My father … always tried to explain how things work in business in a conversational way, rather than by lecturing you. Those lessons are still there in the back of my mind as I run my own companies.
Seth followed the same pattern with an additional three stores, buying them at low prices, figuring out what needed to change for them to operate successfully and then selling them quickly for a profit.
But it was an opportunity in the IT sector where Seth struck it really big for the first time.Finding business opportunities in IT
Though he had honed his business skills over the years since he’d moved to Canada, Seth had no experience in IT when he was first approached by his brother-in-law about going into business together in the field. Seth’s brother-in-law, a computer engineer who had worked in Norway, was also living in Ottawa and had identified a need for IT training centres in Canada.
“It was difficult at first because I had no background in IT, but I spent the next few months shadowing him and soaking up everything I could learn about IT and computers,” Seth says.
Six months after they opened their IT training centre, they were so busy they had to expand. They got even busier when they struck on the idea of developing computer-based training modules so students could learn at their own speed from any location — a common practice now, but it was innovative at the time.
Within two years, Seth and his brother-in-law had 35 software engineers working for them in Canada. Through persistence — verging on stubbornness — Seth was also able to attract the attention of a major U.S. marketing firm to use their services. Landing the business took Seth 47 phone calls before the U.S. firm’s CEO finally returned his call and gave him the time to make his pitch. The firm ended up liking Seth’s company so much that they purchased it for themselves in a $6 million deal.Onto a new tasty venture
Throughout his work life, Seth had always felt a strong passion for food — something else his father had instilled in him. After nearly a decade in the IT business, Seth decided to shift gears and set his sights on the food industry.
“Every Friday, during my last two years in IT, we used to bring in chefs from the top Indian restaurants in Ottawa to cook for our staff. That really got my passion for food burning again,” Seth says.
He studied what was then called the Café Supreme chain, which has since been rebranded as La Prep. He convinced the chain’s owner to allow him to buy the rights for Southern Ontario as a master franchisor and opened his first store in 1999 in Toronto beside St. Lawrence Market.
But Seth quickly ran into problems. The location was far too large and expensive to maintain. He had difficulties with his landlord. He battled against mixed branding. Not enough customers came through the door. He shut the restaurant down after one year, losing approximately $500,000 in what Seth calls the most-expensive lesson he has ever learned. Most importantly, he decided stand-alone locations wouldn’t work for the chain and they would do better in places where there was already heavy foot traffic, such as malls and office towers.
Seth put the lessons he learned through the restaurant’s failure to the test in 2001 when he opened his second location in Erin Mills Town Centre. It was a hit, followed by a steady list of new locations in the years after — all of them successes.
Last year, Seth bought out the previous ownership group and became the chain’s owner. Today, La Prep has 50 locations across the country and Seth aims to double that number within the next four years.
Two years ago, Seth also launched a separate restaurant concept — a unique Indian street food eatery based in Mississauga. Inspired by many of the traditional Indian dishes Seth’s father introduced to him during road trips and outings, Chaska offers a rich menu beyond what can be commonly found at mainstream Indian eateries.
The concept is proving to be another hit. Seth has secured four new locations to open Chaska in downtown Toronto in 2019, starting with one at the Atrium on Bay in January.
No matter what field he has worked in — textiles, retail, IT or the food service industry — the one common denominator for Seth has been a passion to learn and a drive to succeed, traits he learned early from his father.
“I think he would be proud. He wanted me to do well,” Seth says.
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