Walking a Fine Line
Oracle officials on Jan. 31 announced the next versions of the companys five major enterprise resource planning suites and outlined the rationale for why customers should upgrade to the new versions of the software as well as to Fusion, Oracles next-generation suite that is still in the works.
While customers seemed excited with the latest suitesand Oracles commitment to develop point editions into the foreseeable futurethe companys stated direction raised concerns about its ability to draw new business through a vertical strategy and to build a strong momentum toward Fusion, at least in the near term.
"With all the new functionality and next-generation features, why should you consider upgrading? Obviously, you have the choice," Oracle Co-President Charles Phillips said during the event here. "A good reason: integrations. We built those integrations [between our suites]. Take advantage of them. And youre getting modern middleware. The more middleware you have, the closer to Fusion you are."
Phillips also outlined Oracles vertical strategy for reaching beyond traditional ERP and CRM (customer relationship management) markets by building industry-specific applications. Largely as a result of its many acquisitions over the past three years, Oracle, of Redwood Shores, Calif., has installed separate business units within the retail, communications, financial services and utilities spaces. Phillips said the four new units not only will add business but also will add to Oracles Fusion middleware bottom line.
In a research note, Sanford C. Bernstein & Co. analyst Charles Di Bona cast doubt on the strategy. "We continue to be cautious about Oracles applications growth pattern and concerned that the vertical acquisitions either may not be growing as described [by Oracle], may be displacing existing Oracle vertical products or may be partially offsetting significant declines in the core suite offerings, or some combination of these," Di Bona wrote Jan. 31.
Analysts say Oracle seems to be faring much better with its strategy of maintaining the application suites it has acquired, the genesis of Applications Unlimited, Oracles program to support applications gained through acquisitions.
In a presentation, John Wookey, senior vice president of application development for Oracle, outlined the highlights of Oracle E-Business 12, PeopleSoft Enterprise Suite 9.0, Siebel CRM 8.0, JD Edwards EnterpriseOne 8.12 and JD Edwards World A 9.1 and, again, touched on Fusion.
Through Wookeys presentation, Oracle wanted to bring to customers the message of stability in the face of innovation. Thats a good thing, said Robert Lieberman, senior vice president and CIO at New Plan, a commercial insurance company in New York. Prior to Oracles Applications Unlimited announcement, when the companys plan was to support PeopleSoft, JD Edwards and Siebel applications only through 2013, Lieberman said the 2013 timeline was all anyone could focus on.
"The Applications Unlimited announcement that Charles [Phillips] put out last year, I dont think people heard it. Or they didnt hear him," said Lieberman, who is also director of JD Edwards Quest user group global board.
Despite educating customers about Oracles plan at events such as the one here, customers are unsure whether they should upgrade to the next version of their current suite, upgrade to the latest versions announced last weekOracle E-Business Suite 12, PeopleSoft Enterprise Suite 9.0, Siebel CRM 8.0, JD Edwards EnterpriseOne 8.12 and JD Edwards World A 9.1or wait and upgrade to Fusion. And theres still the lingering question of a forced upgrade.
"We spend a lot of time making sure there is upgradability" from the current suites to Fusion, Wookey said in response to a question. However, all this work on Oracles existing suites may backfire on the companys Fusion investment. Lieberman said his plans to move to an SOA (service-oriented architecture) are years down the road, given that his company is happy with its investment and the functional upgrades in the JD Edwards EnterpriseOne suite.