"No Oracle Fusion Applications in 2008"!
On January 18, 2006, Oracle announced “Halfway to Fusion” in which they proclaimed…
“The company is halfway through the Oracle Fusion Applications development process and has a detailed roadmap for new functionality that will enable its diverse customer base to plan to upgrade to Oracle Fusion Applications.
Nearly 3 years later, Oracle Fusion Applications maintain a mystery. In fact, Oracle’s Fusion strategy has changed more times than Britney Spear’s outfits at the MTV awards. For those taking notes, a brief recap…
2005-2006
Fusion was to be a complete rewrite of all Oracle+PeopleSoft+JD Edwards+other applications, taking the best of all of the overlapping applications and re-platforming on “Fusion”. Two years later, Oracle changed course resulting later in John Wookey, then head of applications, falling on the sword and resigning.
2007-2008
Fusion was to be a new “SOA-enabled” platform, allowing customers to maintain existing applications, follow their upgrade path, and plug in new modular Fusion applications as they become available. More recently (and quietly) another resignation, this time, Jesper Andersen, Sr. VP of Application Development (although his bio still appears on their site). Interestingly, in 2007, Oracle put in place the good ‘ol, “I could tell you but the SEC would have to kill me” strategy.
Today
A particularly special day because its the start of Oracle’s annual OpenWorld conference. Oracle President Charles Phillips barely mentioned Fusion applications in his opening keynote, a topic of interest for many in attendance (congratulations on the stock price, though). If I heard anything from Mr. Phillips today its that Fusion, through its middleware approach, is going to be damn expensive.
More importantly, though, not one person I have spoken to inside and out of Oracle over the past 3 years has ever seen a Fusion HCM application. This list includes notable Gartner analysts and longstanding Oracle customers. In fact, Jim Holincheck confirms today that “…there will be no suite of Oracle Fusion Applications delivered in 2008″. If you remember during Larry Ellison’s OpenWorld keynote last year, he promised Fusion HCM applications “in 2008″.
Which brings me to my question (or questions). Is Fusion still worth waiting around? Are PeopleSoft Enterprise 9.1 (delayed until 2009) and Oracle E-Business Suite 12.1 really worth the investment especially considering the lack of clarity around Fusion? Is it finally time to consider alternatives? Many enterprise clients I have spoken to over the past 3+ years have had a postponement (or “do nothing”) strategy in place, anticipating Fusion. Thankful for me, I don’t have to make any of these decisions because I don’t own an Oracle application. For many, though, I would argue their Oracle application assets are quickly turning into liabilities because of the undelivered Fusion promise!
Where do Oracle customers go from here?
September 23rd, 2008
10 Comments Add your own
1. Naomi Bloom | September 24th, 2008 at 4:18 am
Jason, I agree. We’ll see Fusion HCM sometime after the 2nd coming, which may well coincide with SAP’s launch of a its next generation HRM suite, which was initially set for 2010. Fortunately, there are a range of good options depending on each end-user organization’s needed business outcomes, HRM and IT strategies, level of investment (not just $$, but careers, management bandwidth, interconnections, etc.) in their current state, and willingness or urgency to consider their options. Your notes above and those options could make for an excellent topic at HR Tech’s analyst panel in case Mr. Kutik is reading this.
2. Larry Dunivan | September 24th, 2008 at 6:13 am
Well, I have a great suggestion for an alternative..one guess!
And to be fair, what Oracle has tried to tackle is enormously complex and difficult — and it’s so easy to get ‘happy ears’ about how long it will take. So it’s no surprise to me that it’s taking longer and longer.
3. Anon | September 24th, 2008 at 7:22 am
As Larry points out, not surprising. Oracle’s $30+ Billion acqusition binge is coming back to bite it big time. First John, then Jesper (who was grossly incompetent BTW). Where’s Ray Lane when you need him?
4. Christa Degnan Manning | September 24th, 2008 at 10:22 am
Come on Jason you have spoken to me - I just couldn’t tell you what I saw
5. HCM Insight-er | September 24th, 2008 at 10:49 am
I’m not sure anyone can call this acquisition binge “biting Oracle” in any way. Let’s review. Oracle acquired a series of HUGE customer bases in JD Edwards, PeopleSoft and Siebel (just to name the three largest swallows.) They immediately began to reap the rewards in terms of annual maintenance, cross-sell/up-sell of new products (no matter which brand), etc. Everything from their revenues to their earnings to their profit margins, have gone straight up. Their 40% 1st quarter profit margin just announced is a record for the company (and likely for ANY company in enterprise software.)
In January, 2005, when the PSFT acquisition was just closing, Oracle management circulated a “Rules of Engagement” document addressing which product lines were to be sold going forward, in which circumstances. For purposes of this discussion (and considering this blog name!) only HCM is really interesting. And the really interesting part is that management attempted to mandate that for all “greenfield” HCM opportunities, Oracle E-BS HRMS would be the one and only new product to be sold. In many, many years in this industry, I’ve never seen instructions and policies so flagrantly violated as that Rules of Engagement document. And guess what? The rank and file sales teams were right, management was wrong, the money was green, and all was right with the world. No matter what you may think about the relative merits of the two HCM suites, PeopleSoft’s brand power was geometrically greater than Oracle’s, and that’s what sold. (Meanwhile, in another part of the country, in October of that year, Bill Kutik held a special, invitation-only session at his HR Tech show for Oracle and particularly PeopleSoft customers. When an attendee asked if PeopleTools would be “retired” as a result of Fusion development — cause, let’s face it, no matter how much you like PeopleTools, they ARE proprietary — the answer was yes, and a riot almost broke out!)
Now Oracle may be a lot of things, but stupid they are not. On the one side, (delay or deny Fusion) they have huge cash cows of maintenance, multiple product lines to offer prospects, and a relatively happy, contented PSFT client base. On the other side, (Rush Fusion to Market) they have huge investments, 2-3,000 (eventually) discontented PSFT HCM customers possibly looking to jump ship, and the usual first release pains of a supposedly revolutionary platform (which history tells us Oracle doesn’t do so well! — the more revolutionary the more painful! Anyone wanna live through the 10.7 to 11.0 release migration again — on HRMS OR ANY OTHER APPLICATION? Didn’t think so!)
If you’re Larry, Charles and Safra, which would you choose?
6. Jason Corsello | September 24th, 2008 at 11:19 am
Excellent insight and spot on. Oracle, in the end, has played this acquisition strategy brilliantly. As I have mentioned in the past, Apps Unlimited, as part of that strategy, was absolutely right.
What has been good for Oracle, though, has not necessarily been good for customers. To Oracle’s credit once again, though, they are smart enough to know they have a committed customer base (note: I did not mention satisfied)!
7. HCM Insight-er | September 24th, 2008 at 3:16 pm
The best measure of whether it’s good for customers or not is the percentage of those customers leaving the fold. I see many customers selectively leaving the ERPs (not just Oracle, but SAP and others as well), but generally only for Talent Management and other specialty applications — they seem to retain PSFT/ORCL/SAP for their HR system of record.
But I also think that one of the most interesting analyses to be conducted (it will have to be in retrospect, about 12-18 months from now) will be to contrast Oracle’s approach to their acquisition of PSFT with Taleo’s approach to their acquisition of Vurv. In some ways, they couldn’t have taken more opposite approaches. Of course, this was largely because they had to — a true single code line, multi-tenancy SaaS vendor has no choice but to take a certain approach, which is at the opposite end of the spectrum, from a perpetual license, on-premise installed, highly customized by the customer software system. But regardless of the business model exigencies that drove these two vendors to the opposite ends of that spectrum, customers will still react on the basis of all those awful human emotions and behaviors — anger, disillusionment, and the one that software vendors who depend on maintenance income hate the most — free will. Couple that with the relatively short term of most SaaS contracts (generally three years), and you have a very interesting basis for comparison between the two acquisitions!
It’s already been three years since Oracle took over PeopleSoft, and they’ve done an admirable job, IMHO, of retaining their customers, regardless of the grumbling that might be heard at Moscone Center this week. Where will Taleo be with regard to their Vurv customers three years from now?
8. David Haimes | September 26th, 2008 at 4:26 pm
Floyd Teter apparently has seen Fusion Apps, he posted a lot of pictures of Fusion Applications from a session at Open World
http://s216.photobucket.com/albums/cc67/fteter/OOW08/Wednesday/?start=all
9. Steve Boese | September 26th, 2008 at 4:47 pm
I am going to add one slightly different angle to the conversation, which is to comment on the shockingly horrific project my organization has endured (and is still battling), upgrading from Oracle e-business 11i to R12. We have been at this for one full year, and rarely does a day pass when we don’t have to open another service request for a new bug.
I imagine there still is a large base of E-business customers still on R11i that are weighing their options, and if any of them spoke to me (and a couple have), they would have to seriously start considering alternate strategies.
Admittedly, the majority of serious issues have not been in the HCM applications, but in the Financial apps. But realistically, how many E-business suite customers are just running HCM and not Financials?
I have worked with Oracle apps since R10.5 and R12 is by far the worst release I have ever seen. I can’t believe we are the only site in this situation, and a company like Workday I would think, will soon start taking advantage of these developments.
10. AntoineHepburn | March 2nd, 2009 at 9:00 am
Did anybody really believe for a split second that Oracle was going to deliver a best-of-all-world Fusion product? When Larry first launch his bid to buy PeopleSoft he clearly stated he wanted to kill its product line and move the (expensively bought) customer base to the Oracle product. Only the ensuing furore made him recant and pay lip service to th enotion of vague support.
Everybody knows that Fusion is going to be absed on Oracle EBS with the only PeopleSoft, Siebel et al. input coming from some bells and whistles and experience that would be used. So Fusion for all intents and purposes is going to come, sure, but be nothing more than Oracle post release 12.
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