Oracle opens unit for AP embedded market

The software vendor will work with partners to develop embedded software for Asia's 3G, vehicle information systems and telecoms equipment markets.

SINGAPORE--Oracle has announced a new business unit to cash in on the burgeoning embedded systems market in the Asia-Pacific region.

The Oracle Embedded Business Unit (EBU) will focus on establishing licensing agreements with ISVs (independent software vendors) and OEMs (original equipment manufacturers), allowing them to integrate Oracle software--namely its database and middleware products--directly into end-user devices such as handsets, home appliances and cars.

An embedded system is a special-purpose device that is designed for the tool it controls. Embedded systems, such as handheld devices, and telecommunications network gear, have specific requirements and perform pre-defined tasks.

The newly-formed Oracle EBU will focus on developing embedded software for markets, such as 3G communications, home entertainment, in-vehicle information systems, and telecommunications equipment in the Asia-Pacific region.

According to Mark Barton, the unit's vice president for Asia-Pacific and Japan, the announcement is the company's inaugural outing.

"This is the first time Oracle is setting up a focused unit to drive this business," he said. "[Oracle] U.S. and EMEA (Europe, Middle-east, and Africa) have not formally announced an Embedded Business Unit, but I anticipate that they will follow [suit]."

Barton declined to provide details on ISV partnerships that Oracle is establishing, and also declined to reveal how many employees the EBU currently has and if the company is planning any new hire. But he did say that it will be looking to double the number of staff the unit currently has over time.

To drive development and testing of its embedded systems, Oracle plans to launch innovation labs in China, India, Japan, Korea and Singapore, Burton said. These labs will have "close development links with the United States", he added, but again, he was unwilling to say when the labs will open.

Hugely embedded in India, China
According to India's National Association of Software and Service Companies (NASSCOM), the embedded systems market last year generated US$25 billion worldwide. Although there were no estimates on how much the Asia-Pacific region's embedded market is worth, China and India are already racking up impressive numbers.

According to a joint NASSCOM-McKinsey report, in India alone, exports of embedded systems totaled US$1.6 billion between 2003 and 2004, a 44 percent over 2002 to 2003.

CCID Consulting stated that, in China, the embedded software industry racked up US$900 million in 2004, accounting for 31 percent of the total sales revenue in China's software industry that year.

According to Barton, Oracle's worldwide embedded systems revenues grew 60 percent in fiscal year 2005, ended May 31, while its Asia-Pacific embedded systems revenues grew more than 200 percent in the same period.

Other vendors vying for a piece of the embedded systems pie include players such as Microsoft, Sybase, as well as several Linux start-ups.

Oracle has been gearing up to join the bandwagon. Earlier this month, the database giant acquired open-source software company Sleepycat Software for an undisclosed sum. The latter's Berkeley DB open-source database is touted to complement Oracle's existing line of closed-source databases for embedding within applications.

Over the next 12 months, Barton said the Oracle EBU will focus on embedding its infrastructure software, including products such as Database 10g, Oracle Lite, Sensor Edge Server (RFID), Oracle Times Ten, and Oracle Application Server 10g.

As the embedded systems markets mature, he added, Oracle plans to embed more of its product portfolio including its flagship application suite, Oracle E-Business Suite.