Oracle: 25% of LatAm bank clients on Fusion Middleware by year-end - Regional

US database solutions developer Oracle (Nasdaq: ORCL) expects to end this fiscal year with about 20-25% of its Latin America banking clients using Fusion Middleware products, Oracle Financial Services director Luis Arturo Díaz told BNamericas.

Fusion Middleware is the mechanism Oracle uses for talking between different components that may be from rival suppliers or its own subsidiaries, and the ultimate goal in the banking sector is to eliminate fragmentation of systems and platforms, integrating front office and back office systems.

By integrating the applications of recent acquisitions such as Retek and PeopleSoft, as well as companies such as i-Flex and Siebel, which are set to become subsidiaries, Oracle is going through a consolidation phase that the banks themselves need to go through, Díaz said.

Oracle plans to maintain the brand names of its acquisitions, chairman Charles Phillips said this week at a company event in Orlando, and according to Díaz, Oracle will continue to issue new versions of these subsidiaries' products until 2013.

From that year on, new products will only be in the mold of the Project Fusion plan announced this week, and will combine the best aspects of each component. The lifetime support pledge, also announced this week, means Oracle will always continue to support products issued prior to that date, the company says.

I-FLEX OWNERSHIP CHANGE

i-Flex is a financial services specialist and Oracle's plan to buy 41% from Citigroup (NYSE: C) plus 20% from private shareholders is particularly important for Díaz's division. The deal is still undergoing approval processes, which should end in December, he said.

The unit will continue to operate as an independent company, producing its own products, although Oracle will make the most of that technology.

"Independently of this deal we have been working with i-Flex for a year or so, in next generation core banking, to integrate its Flexcube offering in our range of services," Díaz said.

This would combine the functionalities of Middleware, Oracle 10g, its classic database solutions and its BPEL business process management technology. Some specific client needs may be to integrate Flexcube with Oracle GL, core banking systems with Oracle procurement platform, or core banking with BPEL services, Díaz added.

"This will benefit our established clients primarily, such as Banco de Chile, which is already a customer of both suppliers. There are also some clients in Venezuela in this category," he added.

The technological advantage is that there are fewer interfaces, new modules can be incorporated faster and there is more efficient use of investments, according to Oracle.

MARKET SHARE

Once the Siebel acquisition and i-Flex ownership deal go through almost all Latin American banks will be using some kind of technology related to Oracle, compared to more than 70% at the end of Oracle's last fiscal year in March, Díaz said.

Acquisitions apart, Oracle's market share in Latin America's banking sector grew 15% in the fiscal year ended on March 31, partly because of a drive on the part of the banks to upgrade their applications, Díaz said. This is a growth trend that Oracle expects to continue in its current fiscal year, he added.

"The idea is to help clients transition [through whatever upgrades they may seek] as smoothly as possible, without forcing them to upgrade before they're ready," Díaz said.

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