Tuesday, August 6, 2013

Oracle Fusion Applications: Dead End? new Strategy? or Business as Usual

More than ten years ago I presented in a local ERP conference in Haifa.

I am not an ERP expert. I was invited to present because I worked as a self-employed consultant for GiGa Information Group, which was acquired in February 2003 by Forrester Research.  

Instead of presenting non-expert's presentation, I preferred to tell the audience that I am presenting Giga's Analyst's Byron Miller's presentation.

Miller's presentation was interesting. He described three ERP states, depicted in the simple image above. I built a simplified image based on his classification.

The current state, in 2002, was Suite state. transformation to the other states requires advancements in Technical Integration and in Semantic Standards.

The harder task is Semantic Standards, therefore different ERP states are applicable for the same level of Technical Integration.

Suite state, in which you have to chose a single ERP vendor solution, is the less desired state. According to Byron Miller's analysis the probability of this state is the highest. 

Vendor Ecosystems is a state in which it is possible to replace a vendor's ERP/CRM components, by its business partners' components because they comply to the same Semantic standards. 

The most desired state is New Best of Breed World. In BOB World state you can intermix any ERP vendors components because all comply to the same Semantic standards. However, the probability of this state is the lowest.

The transition from Vendor Suite state to more advanced states, was part of ERP and CRM vendors' stategy to change their ERP Suites to SOA based or Service Based Architecture. The main advantage of SOA based ERP is Agility and  flexebility.

Oracle and ERP suite status
Probably, Miller did not think that his 2002 analysis will be still relevant to Oracle's ERP in 2013.

Oracle Fusion Project is an Endeavour aiming at advancement from Vendor Suite (many Suites in Oracle's case) state to Vendor Ecosystems.
The Project begun on 2006. 

Oracle Fusion Applications was released on 2011 and used by Early Adopters.

After it was released, I wrote a post titled: Oracle Fusion Applications Respect and Suspect

Mark Fontechio wrote in PeopleSoft Planet Site that Oracle Fusion Applications is ready but are the users ready? I suspected that it was not ready yet. 
I also predicted that Oracle's Peoplesoft users, Siebel users, J.d. Edwards users and other Applications products (acquired by Oracle) users, will finally have  no choice and migrate to Fusion Applications.

I was wrong and Mark Fontechio was right. The Customers are not ready yet.
The bad news are that nobody can tell if they will ever be ready or when they will be ready. 

According to readwrite's Anton Gonsalves, a Forrester Research's report, titled: Oracle's Dilemma: Applications Unlimited Versus Oracle Fusion Applications, found that most of Oracle's client have no plans to migrate to Fusion Applications. Forrester's survey of Oracle's clients found that "65% has no plans to move to Fusion Applications and another 24% were on the fence."

Many customers think that if it is not broken do not fix it, i.e. they are satisfied with their current PeopleSoft, J.D Edwards or Siebel Applications.

As far as those who are not satisfied are concerned, 
"29% were planning to move to another vendor's SaaS Applications or Packaged Applications", due to high maintenance costs and difficulties to upgrade. 

Oracle's Dilemma
Oracle spend a lot of resources during its 7 years Fusion Applications effort. Should it continue to support it concurrently with multiple applications support or should it change its strategy?

According to Forrester's report,  a new unifying strategy could be SaaS based strategy.

SaaS based strategy has limitations as well. 

My Take
The probability that a big Endeavour will fell is a lot higher than the probability that smaller projects fail.
This conclusion apply to Application Developemt, as well as to Vendor's products development.

Longer development period is a recipe for failure. 
Five years from 2006 to 2011 is a long period.

Oracle's new anouncements of Oracle 12c database including built in Multi-tenancy and Cloud Computing partnership with Microsoft, Salesforce.com and Netsuite indicates that Oracle would like to become a significant Cloud Computing player.

Will it try to build a Cloud based Vendor Ecosystems? It is to early to tell.
In my opinion oracle's Cloud Computing efforts ,at least for the Short Term, will not replace the current Fusion strategy, but coexist with it.  
  







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