News & Views

January 3, 2011 from InformationWeek – “…While a handful of IT companies are hoping to play the dominant role in shaping the business-technology landscape in the coming decade, Oracle and CEO Larry Ellison stand alone in their willingness to state that strategy publicly in blunt, uncompromising, and stop-me-if-you-can terms.

IBM, Hewlett-Packard, and SAP are the other major contenders—and we’ll dig into each of their broad approaches and corporate visions in forthcoming columns—but none has been as forthcoming as Ellison in spelling out what they’ll do, when they’ll do it, how they’ll do it, and to whom they’ll be doing it…”

180 View – Part of the plan is “Oracle’s planning a slow rollout of its long-delayed Fusion apps this year, but Ellison was bullish about the prospects those products will have in the context of Oracle’s overall strategy.” It will be a huge challenge for Oracle to be successful with Fusion and at the same time be successful with their other ERP applications. Microsoft had a similar strategy many years ago but abandoned it in favour of enhancing its existing ERP systems.

November 21, 2010 from The Enterprise System Spectator – “Despite their dissatisfaction with Oracle support, their lack of interest in Fusion, and their complaints about Sun costs, only 25% of our respondents expect Oracle to have a smaller share of their IT budgets over the next three years… In other words, whatever their complaints, the majority of Oracle apps customers do not plan on changing course. So why do customers stay? This is the big question. If things are as bad as our respondents say they are, why aren’t they moving en masse away from Oracle? We didn’t specifically ask this question in our survey, but based on many of the comments, I can postulate three types of Oracle apps customers…”

180 View – The author’s reasons are basically 1) standardization, 2) costs, and 3) lack of alternatives. We agree with the reasons but also think that it’s only a matter of time before reasons 2 and 3 may no longer be as persuasive for unhappy Oracle customers.

September 20, 2010 from The Enterprise System Spectator – “Over at Computer Economics, we’ve been running a survey for customers of Oracle Applications. We’ve received nearly 100 responses so far, which is enough for us to begin to see some patterns taking shape.

Service and support. There is a lot of dissatisfaction among Oracle customers concerning the quality and cost of Oracle maintenance and support. For example, 48% of E-Business Suite users and 41% of PeopleSoft users express dissatisfaction.

But what really bothers customers is the cost of support: a whopping 63% of EBS users and about half of the PeopleSoft and J.D. Edwards users say Oracle support costs too much…”

180 View – I have heard similar complaints through the grape vine but thought that what we had heard was just an anomaly. It does not make sense that Oracle or any other vendor would allow their clients to become unsatisfied with service and support. Maybe they don’t know. Or maybe they think their clients will never leave them no matter what.

September 22, 2010 from InformationWeek – “Theatrics aside, Ellison’s conversion from cloud-ranter to cloud-computing arms merchant reveals a great deal about today’s rapidly shifting IT landscape….”

180 View – Good article if just for Larry Ellison’s (Oracle CEO) view on the difference between SaaS and Cloud Computing. According to Ellison, Cloud Computing provides each customer with their own separate and virtual environment including hardware and software that can run a wide variety of applications – sometimes called a private cloud. SaaS (Software as a Service) on the other hand is one application and the environment is shared by many customers. SaaS vendors will tell you that the shared environment (also called multitenant architecture) is a positive in that there is much less work involved in maintaining and updating the application.

August 4, 2010 from Information Week – “From those recent interviews with Oracle executives, plus an extensive analysis of public comments made by Ellison and other Oracle execs in the past 15 months, I’ve come up with what I think are the five main elements of Oracle’s strategy for the next couple of years. This strategy animates not only Oracle’s efforts to overtake both IBM (in high-end systems) and SAP (in enterprise applications), as Ellison has vowed to do, but also Ellison’s desire to reshape (a) some of the fundamental ways in which the IT industry has operated for the last 20 years, and (b) the standards by which customers will judge IT vendors. I’ll list those five and then go into more detail on each…

1. Optimized Systems and the Exadata Phenomenon. I’ve put this at the top of the Oracle strategy stack…”

180 View – You’re probably wondering what is meant by Exadata Phenomenon. In a linked article, we found the following explanation “Our overall strategy right now going forward is not to sell those individual industry-standard components on their own but rather group them together into machines like Exadata, where we have processors, networking, storage, storage software, database software, our Oracle Enterprise Linux operating system—all as a complete database machine for both transaction processing and data warehousing. We think that makes it much easier for the customer—they don’t have to buy all the individual parts and glue them together—but instead they buy the boxes: a high-margin product for us and a high-value purchase for them because they don’t have to spend a lot of money on systems integration.”

I can see the value proposition but there are many organizations that would not want to completely be at the mercy of one technology company.

April 23, 2010 from Information Week – “Phillips says the mix-and-match approach is killing IT organizations, and the only salvation is standardization (on Oracle, of course)…”

180 View – It’s a slippery slope to standardize on one vendor.

March 29, 2010 from InformationWeek – “…In Oracle’s earnings call late last week, Ellison promised that the second half of 2010 will be a momentous one for not only Oracle but also the entire IT industry and its enterprise customers because that’s when Oracle will roll out its completely reengineered Fusion software lineup along with more integrated and optimized Oracle-Sun systems…

Fueling Ellison’s bold claims was his promise that Fusion will permanently close the gaps between its traditional on-premise technology and the high-growth opportunities in on-demand and cloud-based applications…”

180 View – Oracle is about to change the game with Fusion. But the skeptic in me says that the new product will be light on functionality compared to its siblings – Oracle E-Business Suite, PeopleSoft and JD Edwards.

December 4, 2009 from AMR Research and written by Bruce Richardson – The answer to one of Bruce’s questions about what’s different in Fusion (Oracle’s soon to be released new ERP system) was – “In designing Fusion Applications, we wanted every part of the application to be business intelligence (BI) driven—every part—from the navigation, to the workflow, to the most basic transaction. We looked at every business task and from a role-based perspective, asked, “What do I need to know and what do I need to do? Here’s an example: A typical payables manager who uses our systems every day is presented with a menu that has a list of items: invoices, payments, suppliers, and bank accounts. The manager then needs to issue queries to process transactions. In a BI-driven system like Fusion Applications, we proactively alert the manager to what he or she needs to do: “You have five payments whose early discounts are about to expire,” “You have three suppliers on hold,” and “You have seven invoices awaiting your approval.”

Then once they start to process, we tell them what they need to know: the number of times that this supplier has delivered late, the quality of their service, and who gives the best discounts for early payments. Business intelligence becomes more than just metrics and key performance indicators (KPIs) after the fact. [It] should help you do business…”

180 View – We like what we hear, and hope that Bruce will continue his good work under new management as Gartner just purchased AMR Research.

October 16, 2009 – “This week Mr. Ellison closed his keynote with the soft launch of Fusion Applications. To be honest, we’re not sure why the company waited until the third day of the event… During his keynote Mr. Ellison acknowledged that new products like Fusion Apps will turn E-Business Suite, PeopleSoft, and Siebel into old, legacy systems. That said, he pledged to support all Oracle Apps Unlimited for another 10+ years and to provide easy connectivity to Fusion Apps through modular upgrades.

The first release of Fusion Apps will include financials, human capital management (HCM), sales and marketing, supply chain management (SCM), project portfolio management, procurement, and governance, risk management, and compliance (GRC). The missing pieces in the initial release include the customer service components of CRM, manufacturing applications, and vertical-specific functionality. No information was provided for the dates or functionality planned for future releases…

We were surprised at how understated the Fusion launch was. One executive told us that this was the intended plan. There’s still a lot of work underway to ensure optimal performance and quality. Oracle didn’t want to overhype the new products for fear that customers might postpone current purchase decisions…”

180 View – Bruce Richardson, the author of the article, is right about customer’s postponing their current purchase decisions. There is no such thing as an easy upgrade path. First, there’s no way that Fusion will contain all the functionality of E-Business Suite, PeopleSoft and JD Edwards. Second, any customizations will not be so easy to upgrade. Third, there is a huge internal cost to move to a new system.

October 11, 2009 from The Enterprise System Spectator – “…Larry Ellison, true to form, spoke mostly about Oracle’s competition, specifically IBM, claiming Oracle’s database running on Sun processors are faster than IBM’s DB2. He reassured Sun’s customers that Oracle would invest even more in Sun’s products than Sun has. And, he also said the right things about continuing to invest in MySQL, Sun’s open source database management system…

In the meantime, take a look at what it’s like at the Moscone Center in San Francisco, with thousands of Oracle Open World attendees streaming into the Ellison-McNealy keynote.”

180 View – Just check out the video for a few seconds to get a sense of what it was like there.

April 20, 2009 from Redmonk – “As you must have heard, Oracle is buying Sun. A deal this big has a lot going on. Really, the only thing you can do is wait and see what Oracle will do with the massive portfolio they’re buying. If you don’t like waiting, here’s some scenario-speculation…”

180 View – You may soon be able to buy all your technology from 1 company. The advantage is you have 1 throat to choke, but you may lose bargaining power and flexibility. But we think Oracle will sell Sun’s hardware business and will just expand their software business.

September 2008 from ComputerWorld – “Observers say Oracle is finally making substantial progress on its next-generation Fusion Applications suite, more than three-and-a-half years after the project was first announced…

Oracle has said Fusion Applications will blend together the best features from its various product lines, which include PeopleSoft, J.D. Edwards, Siebel and E-Business Suite…”

180 View – This article is a few months old so we did some digging to find more recent information on Oracle Fusion. We had trouble finding anything more recent except “Oracle Fusion Applications: Is 2010 Delivery Too Little, Too Late, or Smart Strategy?” published on October 3, 2008 by CIO Magazine that included “Jim Shepherd, senior vice president of research at AMR Research, says Oracle realized that there was no overwhelming demand in the market for a next-generation ERP system, and “most of the acquired PeopleSoft and J.D. Edwards customers were much more interested in enhancements for their existing software than they were in migrating to a new product.” In turn, Oracle has lowered the priority of delivering Fusion Apps to the market.” We agree with Jim Shepherd’s comments but a next-generation system will also allow Oracle to compete with other vendors who have built or are in the process of building these next generation systems that include easier to use systems, collaboration, Web-based (just need a browser) and offered not just on a licence basis but also by application service provider — the pay-as-you-play model, where you don’t need to invest in the infrastructure.

December 20, 2007 from ComputerWorld – “Robust software sales pushed Oracle Corp.’s second-quarter net income up 35% compared with the same period last year, to $1.3 billion (U.S.), or 25 cents per share, the company said Wednesday. Total revenue grew by 28% to $5.3 billion, Oracle said…

CEO Larry Ellison added that Oracle is finding new business by targeting vertical industries that may not be using packaged software like the kind Oracle sells. “Some of these verticals are almost green fields in terms of modern software,” he said. The company’s president, Charles Phillips, echoed Ellison. “We think we’re very early on in this strategy,” he said. “We’re still selling in the verticals who are building applications. We’re trying to convince them to buy packaged applications.”

180 View – Good move by Oracle in targeting the verticals. But how do you take an already complex software system, add more functionality and create something that will not be too onerous to implement? As well, verticals require more than just software; the implementation team also requires industry expertise.

March 1, 2007 from CRN – “Oracle said it would create a more comprehensive business intelligence software suite following its US$3.3 billion acquisition of Hyperion on Thursday. The two firms said the deal, which is expected to close sometime next month, would allow Oracle to integrate Hyperion’s business performance management software into its own business intelligence (BI) product. Oracle’s first BI product was released at the beginning of last year.

Hyperion started out primarily as a provider of financial reporting services but has also become successful with its online analytical processing (OLAP) engine, which allows users to quickly analyze complex queries. A few years ago, Hyperion made a strategic acquisition of its own when it spent US$140 million to buy Brio, which gave it an improved query tool…”

180 View – The acquisition represents the growing trend by ERP vendors to provide an end-to-end solution. Initially ERP was a back office application (financials, distribution…) Then it included the front office (CRM, eCommerce…). And now it includes Corporate Performance Management / Business Intelligence. In the short run, this aquisition should be good for all concerned. But what happens when sales fall off as a result of Hyperion prospects who are reluctant to acquire Hyperion because they don’t use Oracle ERP systems?