Artificial intelligence ideal for populous Asia Oracle says AI will boost Asia’s business capabilities Urges Asian companies to adopt enterprise-wide data strategy

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By 2017-10-18

By Charindra Chandrasena

Over the past few years, industries and businesses have taken a greater interest in the possibilities of Artificial Intelligence, or AI as it is generally referred to, to enhance their products and gain a competitive advantage. It is this drive to harness the true power and possibilities of AI that is bringing us ever closer to realizing its original grand vision.

Technology giant Oracle, which has been at the forefront of this drive, has aggressively pursued the cutting edge of AI, with a particular focus on machine learning and deep learning. Machine learning is a type of AI that allows software applications to become more accurate in predicting outcomes without being explicitly programmed,while deep learning is a sub field of machine learning concerned with algorithms inspired by the structure and function of the brain, called artificial neural networks. In an interview with international media in San Francisco USA, on the sidelines of Oracle's flagship annual conference Oracle OpenWorld 2017, Oracle Senior Vice President – Asia Pacific François Lançon, who oversees all countries in the region, spoke about Oracle's AI offerings, how they can benefit Asian companies and the immense value of data. What follows are excerpts of the interview.

What growth prospects does AI have
in Asia?

A. The Asia Pacific market has an advantage over the US due to its size. Asia Pacific has 4 billion people. That's a pretty good data set. The US has 300 million people. It's too small. I think the advances in APAC with deep learning and machine learning are going to be much more productive than the US market, just because of the size. This technology does not work on hundred thousand. It works on billions.

 

Do you see any reason why AI would not be adopted at scale in Asia?

A. There is one risk with AI, and it's the same as with cloud services. A lot of companies in Asia do not yet have an enterprise-wide strategy. They have an enterprise-wide concept. I don't like to use the word AI. I prefer to say machine learning and deep learning. As I said before, machine learning and deep learning only work on extremely large sets of data. That's the only way to make it work. This means you need the ability to produce very large sets of data. So you need an enterprise-wide data strategy first and not just pockets of AI and that's where I foresee a problem, if at all, in adoption.

What role does legacy systems play in the adoption of cloud?

A. Something CIOs (Chief Information Officers) need to understand is that, with the advancements in technology and hacking, the legacy networks which have been secure for the past 20 years are not secure any longer. Typically, you have a bunch of assembled pieces from 20 vendors, each of them bought at the cheapest price at an auction by your procurement team. My worry, based on what we've seen over the past 12 to 18 months, would be how to secure it. If I was a CIO today, I would wake up in the morning extremely worried about what is secure and what is not secure.

How important is data security?

A. I had a very interesting conversation with a large conglomerate recently, and for me, the companies that get it, realize that data is their ultimate currency. And if it's your ultimate currency, you'd better put it in a place where it's very safe. Your currency is no longer money, it's data. You can monetize it, and you can use it to your competitive advantage. I've been speaking to a few customers who are large conglomerates and they are looking at their data strategy as a differentiator. Especially the conglomerates. So what we are going to see is an increasing focus on how you can protect the ultimate currency.

Oracle recently unveiled the autonomous database. Do you see the lack of a data strategy in many Asian companies impacting its take up in the region?

A. Basically, there are three reasons why you would want the autonomous database. It goes back to the Maslow pyramid. What the autonomous database does, and I can tell you that every CIO I've spoken to over the last two weeks has clicked with it, is eliminate human error. This is priceless. If I was a CIO today I would want to move as fast as possible and be secure.

The second benefit you get is the cost reduction because you will eliminate labour costs. The elimination of labour costs is of course very subjective. I met a CIO and I told him "you can take 20% of your costs down" and he asked me" can I fire 20% of my people?" I would say probably not, especially in an Asian country. But what you can do is employ those people in some other area tied to innovation. This way you can enable innovation.

The third thing is, if I am a CIO, I can go to my CFO and say I need to upgrade my database because I need it for security. Here, you also get something which is current and which you can move effortlessly to the cloud. So you get speed, innovation and security. That is a great deal.

How is the role of the CIO evolving along with the increasing importance of data?

A. The role of the CIO is changing just like any other role, and it's happening in 3 phases. You have the traditional CIO, who's managing a traditional on-premise infrastructure with his good old database, his good old application and his good old department. Then you get the second phase of the CIO who says "Ok, I get it, I need to implement this digital transformation, but only a basic digital transformation,so I will move my shared services to the cloud to bring my cost down and focus on innovation and I will start improving my customer experience". The third generation CIO, who is revolutionary,is not just concerned with that, but focuses on an enterprise wide data strategy. So we are seeing the emergence of this third generation CIO and it is quite interesting. It is going to take some time. Some industries will move fast but some industries, due to regulatory hurdles, will take some time.

From a human resources point of view, what are the talent issues facing CIOs in Asia?

A. If you look at the talent issue, it's not just CIOs. The IT population in Asia has been around a long time, so we need a renewal, which is a mix of education, training and learning the latest technologies. What companies are typically doing is keeping a set of people focused on the private cloud, and then boosting the innovation factor, which was maybe at 20%, to about 50% or more, and building the right persona, building a new model and leveraging artificial intelligence. It's very hard to transform everything. It's easier to keep your own on-premise application and certain new things on the cloud.

How has the cloud influenced Oracle's relationship with customers, particularly in terms of sales?

A. I like people who are business solutions professionals. People who will wake up in the morning and think about how they can transform the business for their customers. That's what I look for. This is about how you generate something that is rewarding in the short to medium-term. Very fast returns on investment. And cloud is great for that because to implement an on-premise ERP solution it will take a year or a year and a half. However, I can implement a cloud based ERP solution in 4 weeks. That means, my person goes to the customer, and 4 weeks later there is something to show the customer.

The Oracle sales team in the region has traditionally been perceived as aggressive, but that was when the cloud and the customers were different and the projects were smaller. Is it now more focused on business outcomes?

A. You cannot change the fundamental nature of sales people, but I can tell you that this is not my focus. My focus right now is about customer advocacy. Cloud is about customer advocacy. Technological changes are fantastic and they can be done over a short period of time. Changing cultures is a lot more complicated and takes time.

You recently mentioned that the term diversity means something completely different in US and Asia. What did you mean by that?

A. I perceive diversity very differently to most people. There is the traditional understanding of diversity, which is male versus female and racial diversity, but I look at diversity in two ways: One is gender diversity. The other one, which is the big one in terms of fostering innovation, is age and cultural diversity. We are talking about customer transformation, but what is my day to day job? It is not to sell software but to transform my organization. So this year I have hired many young people who belong to the millennial and Gen Z categories. So cultural, age and gender diversity are very important.

What is Oracle's strategy for Asia Pacific and how do you plan to attract new businesses?

A. At the high level, worldwide, any CEO is always facing the same issues. How do I get my costs down, how do I grow my top line, how do I speed up innovation, how do I minimize my risk, and the fifth one, how do I get talent? It is the same for pretty much every CEO in the world. My strategy is to make sure that we are positioned to fix those issues. We can't fix all of those issues, but we can certainly help with most of them.

How does Oracle handle the competition from rival companies in Asia?

A. Very simple. We beat them. You have to look at what your competition is. It's very interesting. I don't have one competitor. I have various competitors. My biggest competitor is typically the inertia of my customers. I am in the business of transforming customers by taking their business to the next level. If you're talking about a digital transformation, you have to walk the digital transformation. So if I go to a customer and convince them to be a partner in the digital transformation, I don't have a lot of competition. This is because we provide an end to end experience whereas my competitors provide only one part of the experience.

If I go to the other end of the spectrum and deal in Platform as a service (PaaS), Infrastructure as a service (IaaS) or security then I may be competing with other companies. This is what I call 'commodity business' and there you compete on price. But if I go in for a real digital transformation or a real data strategy partnership, I just have to get my act together, and there won't be any real competition.

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