”SMEs have opportunity to pay for cloud as they go”
Adebayo Sanni is the managing director of Oracle Nigeria, a company providing cloud services to the private and the public sectors. Oracle cloud services allow businesses to manage their data in a most secure way without investing in infrastructure.
Oracle Incorporation, the parent company of Oracle Nigeria, held two events– OpenWorld and JavaOne—in San Francisco, the United States, in September, where several announcements were made, some of which bordered on data security. Sanni tells ODINAKA ANUDU, in this interview, that SMEs can enjoy cloud services by simply paying as they go.
Let me start with Oracle OpenWorld 2016, which attracted 66,000 customers from across the world. What likely impact will this have on Nigeria?
Oracle OpenWorld 2016 was truly exciting. It was exciting for us, including the 66,000 customers coming from different parts of the world. Out of these 66,000 customers, we had over 60 C-level customers from Nigeria, from CEOs to CIOs, down to CFOs, both from the private and the public sectors point of view. We saw a very good representation of Nigerian customers attend this year’s event.
The CEO of one of the top banks in Nigeria was there, and he had an opportunity of meeting Oracle CEO on one-on-one basis. So you can imagine the Global CEO of Oracle having to attend to 66,000 customers, being able to have a one-on-one chat with the CEOs from Nigeria. This is exciting and an indication of Oracle’s commitment to Nigeria. We have to look at the level of excitement we saw from them, because cloud was a key conversation across the entire part of OpenWorld, and the key discussion there was looking at it from the CEO point of view. What is the priority of a CEO when you think about it? The priority of a CEO anywhere, whether it is in Nigeria, South Africa or anywhere else in the world is to gain market share.
Doing that requires reducing costs significantly. They also need to act very quickly in a very competitive world. The only way they can do that is to leverage technology and they need to act now because every day is a bit of a challenge. There is a need to understand that technology is a platform that drives innovation. We think about the challenge we face at a time when 80 percent of the IT budget goes into maintaining old applications that are run on 20-year-old platforms most times. It means you have to spend more on maintaining whatever you have that is already old. When you look at the investment in starting up a new one, it becomes very huge. Now, you understand the CEO priority. You see that with the old infrastructure that a lot of customers have in place, they spend 80 percent of their small IT budget maintaining it.
They spend only 20 percent on innovation. How do you then gain market share? How do you reduce cost? So it becomes a bit of a dilemma for customers. This is where cloud becomes the very exciting phenomenon, because cloud today is not just an idea; it has moved from an idea to what Oracle Global CEO called a generational shift. It is here to stay. Nigeria is going through difficult times. Oil was the number one language. Before us, oil is less than $50 per barrel. At the same time our productivity is down, due to the situation in the Niger Delta.
It means we have to find other sources of revenue either from a commercial point of view or public sector point of view. How do you do that without leveraging technology as a key? The three things we talked about that CEOs want all apply to Nigeria. For us to be able to do that we need to adopt cloud. A lot of the announcements we saw at Oracle OpenWorld-whether it is Software-as-a Service (SaaS), Platform-as-a-Service (PaaS) or Infrastructure-as-a-Service (IaaS)- allow the customers that we have in this country the ability to innovate, because innovation is part of gaining market share.
You gain market share when you have innovative products. Again, you spend less when you have cloud, and you are ready to reduce implementation plan and cost. Oracle spent $5.2 billion on R&D last year alone, which means we have taken the burden off the customer and we are putting that in a solution that allows a customer to move from a capital expenditure (capex) model to an operating expenditure (opex) model. How does it concern most of the customers in Nigeria that are mostly made up of small and medium enterprises? What this means is that whether you are an entry level organisation or the largest organisation in Nigeria, you can move from investing in capital to Pay-As-You-Go model.
Oracle has come up with what we call the Oracle Cloud Machine, which is a machine that Oracle puts in the premises of the customer to ensure that their data is not in any way exposed. You put your machine right behind you. It is one of the announcements we made at OpenWorld.
Did CEOs and CFOs who joined you at this year’s OpenWorld make specific demands from Oracle?
The CEOs and CFOs I have spoken to have the three priorities I earlier mentioned, whether it is in the banking sector, downstream, manufacturing or any sector. The CEOs and the CFOs want to gain market share, and cost is a major problem for us in Nigeria. We are not sure of what is happening next year or the effects of the dollar and investments we need to make. But we need to reduce cost, and we know that timing is very important that we need to begin to act. These are the priorities of the CEOS and CFOs.
From the CIOs point of view, I want to reduce the amount of money I spend on maintaining my equipment. Number two is that CIOs want to focus on innovation and support CEOs to deliver on their market share target. At the end of the day I want my team to spend less time worrying about maintenance. The solution I have today is to move them into the cloud. With our solution, SMEs can start using a database and be able to pay on monthly basis. Some of the banks now that are going into mobile solutions will need to move faster into the market. So I need the cloud solution that allows me to pay this on monthly basis and at the same time makes you to not have huge upfront cost.
Do you have a way of selling your products to SMEs at graduated costs?
The issues Nigeria faces are what we face across Africa. So Nigeria is not isolated, but we understand that the Africa challenge, that a lot of companies are SMEs. For the very first time from Oracle point of view, cloud presents those customers the opportunity to choose and pick their choice, depending on their needs. We have solutions specific to SMEs. We have specific needs of businesses irrespective of locations. Instead of making the huge investment on capex, what we have been able to offer to SMEs is the ability to pay as they go. So depending on the service they need—database or document–, they don’t want to make investments in infrastructure.
This totally changes every single thing for the customer looking at getting into the market very quickly as a two-man or ten-man organisation. The same also speaks of the mid-market customer with a 100-man organisation, who says, ‘how do I effectively reduce my cost?’ At the same time we are looking at the banks that have 500 or 1000 employees, saying their data are so important and, at the same time, wanting to reduce costs. So we are able to offer scalable, powerful, efficient cloud solutions that allow customers of that class to have data security without necessarily investing huge capital.
Nigeria has a large number of the youth. Most of them are uneducated and unskilled. Another group is made of educated but unskilled young graduates. Does Oracle have any plan to engage young Nigerians gainfully with IT?
We have 180 million people in Nigeria, depending on who you are talking with. We easily can say that 60 percent are youth. We are investing in technology, we are growing customers, but there is a skills gap. If you don’t address that, ability to diversify and use skills to drive innovation will be a bit of a challenge. On one side we have the skills gap, which is a challenge, but on the other side it is an opportunity for Nigeria to train its youth. The responsibility is a joint effort by the government and the private sector. Oracle sees this as an opportunity.
What Oracle is doing is that we are working and partnering with government to train the youth. We have things like ‘Catching them Young’ in secondary schools and making sure that they have interest in science and technology. We are going into the university to make sure that Java, which is Oracle‘s most popular language is taught. In Lagos State, University of Lagos and Lagos State Polytechnic all offer Oracle Java. We are working to see where we can train graduates in e-business and database services so that the youth that are graduated will actually be employable. We have partnership with Lagos State where we trained 100 graduates. Lagos employed some of them after we had trained them. We made sure a lot of Oracle customers employed some of them because it gives them an advantage.
The other part is that we are working with Lagos, Edo, Akwa Ibom and other states to make sure the existing employees are trained in technology in a way that they understand governance from a different point of view. What are we doing internally? Every year, we take in interns- fresh graduates of fewer than two years-. We take them through every single arm of Oracle services within the next one year. At the end we retain 25 percent of them and make sure the rest of 75 percent are exposed as partners.