Oracles Customer Data Hubs: The Emperor Does Indeed Have Clothes

By Lisa Vaas  |  Posted 2005-03-10

Oracles Customer Data Hubs: The Emperor Does Indeed Have Clothes

Some 14 months ago, Oracle faced the music. As little as the database giant likes the fact that organizations have business applications made by vendors that are not, in fact, itself, it announced technology to cull, clean and enrich data from disparate sources.

As such, in the pre-PeopleSoft merger days of 2004, when it still had to shore up the trading value of its business applications division, Oracle Corp. made its bid for the nascent CDI (customer data integration) market by announcing at AppsWorld its Customer Data Hub.

Oracles CDH is designed to provide a central data store that cleanses and enriches data from a variety of sources, including outside applications.

It consists of the hub itself, which runs on E-Business Suite; Oracles database and its application server; and a separate integration server that enables companies to model and integrate business processes.

Despite the initial flurry of hub hubbub, this is new technology for Oracle. Kinks are to be expected. At least one analyst, however, charges that Oracles CDH is "drawing yawns from serious CDI evaluation teams," unless such teams are at all-Oracle shops.

CEO Larry Ellison described Oracles latest technology vision as a series of data hubs that will serve as shortcuts to having all data stored in one huge, centralized database. Read more here.

Aaron Zornes is chief research officer at The CDI Institute, a CDI research firm. He recently put out an e-mail alert titled, provocatively enough, "Oracle Data Hubs: The Emperor Has No Clothes?"

In that alert, Zornes contends that theres a dearth of success stories or references for CDH. The CDI Institute interviewed more than 10 enterprises that either have CDH in production or are seriously evaluating CDH, but, Zornes writes, the majority of those sites are running on precursor technology, such as Oracle Customers Online, as opposed to running on the current version of the shipping CDH product.

There is, in fact, no formal training available for CDH at Oracle University, Zornes charged—a true enough charge when he made it. Oracle did, however, turn that situation around this week with the introduction of a new, four-day training course for CDH customers in Oracle University.

But, until recently, Oracle offered no formal training and, according to Zornes, had no referenceable customers who are using a current version of the shipping product. Could it be said, then, that there is actually a product there?

"We disagree violently with what [Oracle is] stating and with whats [actually] out there," Zornes said in a recent interview with "We love their vision, like we like Siebels, but Oracle wont let us talk to their references. And Siebel has more [references] anyway. … The [Oracle] products been shipping a year now, but everybody I talked to had the pre-product."

Zornes cant drop the names of Oracle customers he spoke with, since his conversations took place outside of official Oracle channels, and customers can get in trouble for such exchanges.

But he makes reference to high-end organizations: "Type A" outfits with IT departments that have enough know-how and gumption to take raw components—such as Oracles TCA (trading community architecture) data model from the e-Business Suite—and to then build their own customer data hub around it.

Next Page: Scalability is a big question mark.

Scalability Is a Big

Question Mark">

What are the issues with the technology itself, though, outside of lack of success stories and whether theres training for the product? Scalability is one big question mark, Zornes said, although the CDI Institute expects CDH to ramp up well over the coming 18 months as the product is fine-tuned and as the user base grows.

Oracle does boast of Dell Inc., a CDH customer that has to handle some 200 million customers. "They are our high-water mark," said Peter Heller, senior director of Customer Data Hubs at Oracle. "They require two million updates per day."

Cisco Systems Inc. is another customer, with four million customers, and Oracle also lists telcos with millions of customers as being CDH users.

However, "Theyre the high-end IT shops," Zornes said. "The other people took a variation on this, Oracle Customers Online, and built their own middleware. But they have 20,000 customers, not millions or tens of millions of customers.

"Theyre on the low end, and they were able to take advantage of Oracles data quality routines and Oracles data model, which is a nice data model. And they built something that works. And theyre all looking to migrate onto Oracles products, because they dont want to be in the business of supporting the applications they custom-crafted."

But its not size that matters, Heller says. Oracle is solving integration needs of two types of business, and one of those types is enterprises with smaller customer headcounts but more data sources.

Heller pointed to one CDH customer in France with 80 data sources, while some CDH customers have over 200. "Its not surprising," he said. "For any company of any size, you ask how many customer lists they have. … Everybody, even the smallest companies, have exactly the same problems as the bigger companies."

One early CDH adopter, IHOP Corp. CIO and vice president of IT Patrick Piccininno, praised CDHs ability to deliver a unified view of the restaurant franchisors customers, employees and franchisee community. The company went to CDH from a system of stand-alone spreadsheets and Microsoft Access databases to track its pancake customer interaction, as well as to stay on top of its franchisees and restaurants.

While his is not an enterprise that will need to handle millions of rows per hour anytime soon, Piccininno said that he believes CDH will scale "well past wherever IHOP will take it."

"We dont believe well have a scale issue, either from the database or the architecture weve deployed," he said. "Were probably just scratching the surface. We have 1,200 restaurants, 400 franchisees and 55,000 employees, with 3,000 to 5,000 calls per month in our call center via e-mail and telephone, and the systems barely breathing hard."

Granted, IHOP had to do some customizing, having to build utilization of flex fields and extensions to applications to help meet requirements specific to the restaurant and hospitality industry that werent available in Oracles horizontal solution. The payoff, however, has been worth it, Piccininno said.

"Is the technology perfect? Of course not," he said. "Is everything as advertised out of the box? No, its not. But when youre making technology decisions, especially in the enterprise space, Id argue youre picking not so much the technology of today, but youre betting with organizations who ultimately get it, wholl develop and enhance it, and who share your strategy of where the tool needs to get.

"Oracle is clearly on an evolutionary path. And youre clearly trying to pick the vendor wholl be around in the long term, who can get you where you ultimately need to be. Was it a perfect product? Far from it. Have we experienced challenges along the way? Absolutely we have. Will we see value from the tools? Of course we will. Otherwise we wouldnt invest in the technology to fulfill the long-term strategy."

Next Page: Vendor viability vs. best of breed.

Vendor Viability

How do you go about choosing a CDI vendor? There are a good 50-plus out there, ranging from broad horizontal plays such as Oracles CDH to strong vertical players, as is DWL in the financial sector or IBMs Client Information Integration Solution is in the insurance industry.

Analysts in the CDI space say that the market, while immature, is ready to explode, and the best thing for a company to do is to group with other companies in their sector and go for the vendor that really understands their customer issues better than anyone else.

"If theres someone catering to your vertical, Id jump on that," said Sheryl Kingstone, an analyst with Yankee Group. Oracle has solid examples in high-tech, such as Cisco and Network Appliance, that should give high-tech companies cause to check out CDH, she said.

Then again, Piccininno was right-on when he said he was sticking with a vendor with staying power, Kingstone said. "The tradeoff today is the financial viability of the vendor vs. their expertise in their industry," she said. "Ive talked to customers whove gone with a slightly less mature product today because they know that people like Oracle and Siebel will be around for the long term."

Is Oracle CDH perfect? No, but there are "no perfect products out there," said Erin Kinikin, a vice president at Forrester Research. Forrester recently went out to 18 reference customers: three each from the top six CDI vendors. Core technology wasnt the issue, she said.

"Everybody does pretty well on data management, and some people are better at one thing than another," Kinikin said. One of the weakest areas was, in fact, consulting expertise to get the systems implemented effectively. That, however, is where vendors like Oracle and Siebel excel, she said.

Meanwhile, the next enhancement to CDH is due in April, and with it will come great strides in data stewardship facilities, Kinikin said, with better customization and vertical functionality. She talked to a transportation company, for example, that has to track wage and service levels by customer, by location.

Other vertical weaknesses: TCA, as robust as it is, needs a way for the customer to teach it about insurance products and transportation rates and other details that help insurance companies treat their customers right, Kinikin said.

Vertical capability is Oracles biggest weakness, Kinikin said, but Oracle is already moving to fix that. Witness Oracles recent bid for Retek Inc., maker of retail software. Oracle President Charles Phillips described the hoped-for Retek acquisition as being Phase Two of Oracles master plan, wherein Oracle masters the ability to cater to key verticals. Phase One was getting the back-office applications business in order, and thats where the PeopleSoft acquisition came in.

Does the emperor have clothes? He does. Perhaps they are ill-fitting Bermuda shorts in the chilly March winds, but the tailors are already at work to provide a better fit for a variety of clientele.

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