AMR Research Update on Fusion Apps


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From today's "First Thing Monday"--AMR Research's weekly newsletter on the future of ERP apps.

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Larry’s Soft Launch of Oracle Fusion Applications by Bruce Richardson

On January 17, 2005, Oracle CEO Larry Ellison told a very crowded auditorium about his plans for Project Fusion. As he envisioned it, the new initiative would encompass a new architecture, middleware, and application suite. If you remember, the PeopleSoft acquisition had just closed after a protracted 18-month battle, and he wanted to prove to customers that he was going to invest in further product development of its applications as well as create new software.

For us, the most interesting aspect of the Project Fusion announcement was his commitment to delivering a next-generation application suite that would take the best of Oracle E-Business Suite, PeopleSoft, and JD Edwards. At the launch, John Wookey, Oracle’s senior vice president of application development, said the new application must-haves would include a flexible Java architecture with “robust, configurable business process automation, superior usability, and real-time information access and reporting.”

As we wrote at the time, Oracle expected to deliver the first Fusion Application suites in 2008. That goal slipped past quietly, thanks to a variety of factors, not the least of which was the company’s subsequent buying frenzy. Buoyed by the success of the PeopleSoft acquisition, Oracle went on to spend another $30B to $35B on Agile Software, BEA Systems, Demantra, Hyperion, i-flex, Primavera, ProfitLogic, Retek, Siebel, and 50 others. The excitement for next-generation applications gradually faded away.

Fusion Apps are coming! Fusion Apps are coming!

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. Fusion Apps could have been the centerpiece of any of the main-stage keynotes by Charles Phillips/Safra Catz, Thomas Kurian, or Steve Miranda. Instead, the Oracle execs used their time slots to talk about Oracle’s Applications Unlimited, new releases, and the ease of creating composite apps. Although the continued development for existing apps is reassuring to customers, the keynotes exposed the plethora of user interfaces that exist across the always-expanding application set.

In fact, 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.

Mr. Ellison flashed a slide featuring some of the 700+ companies that saw a preview of the product. Many of the logos were those of well-known SAP customers. That was intentional.

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.

In addition to the seven core modules, there are “net-new” apps, including distributed order management, talent management, incentive compensation, territory management, financial accounting hub, sourcing, customer data hub, and product data hub. They’re designed for selling into the existing base and to new accounts.

All Fusion Apps are designed to be deployed as standalone modules or as part of a suite. Likewise, all modules will be available in the traditional on-premises model. They could also be implemented as a software-as-a-service (SaaS) or cloud offering, even though Mr. Ellison appears reticent to endorse clouds. A third option will be to deploy the new software as part of a business process outsourcing (BPO) initiative.

The new software also includes embedded business intelligence. For users, that’s one of the advantages of native web services and a service-oriented architecture. It also makes for great product demos.

The company has clearly met Mr. Wookey’s original design goals, especially “superior usability.” One look at the new software and you’ll agree the development organization has traveled light years from Oracle Forms. One positive surprise was the extensive testing with end users that began in June 2006. Mr. Ellison flashed a slide featuring some of the 700+ companies that saw a preview of the product. Many of the logos were those of well-known SAP customers. That was intentional.

There’s a lot more to Fusion than Larry told you.

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. Still, because of the low-key approach, I don’t think most attendees understood the significance of this announcement. But then again, they didn’t have the benefits of all of the pre-briefings we received.

Starting this summer and culminating in a two-day analyst briefing at company headquarters in early September 2009, Oracle began to share its plans under a strict non-disclosure agreement. The first briefings featured one part of the product line, such as HCM and CRM. It wasn’t until we went to Oracle’s headquarters that we saw the full extent of the company’s development efforts.

On September 2, Steve Miranda, senior vice president for development, walked a small group of analysts through his development strategy and plans. His design goals included a unified technology foundation and data model built on top of Fusion Middleware.

There’s a lot more to Fusion than Larry told you.

The software was built using a model-based framework that allows developers to create a template or model of the application, instead of hard-coding the functionality. In his presentation, Mr. Miranda showed a chart of the database schema and code artifacts. It consisted of 5,440 tables, 6,534 entity objects, 18,385 view objects, 2,501 app modules, 1,215 services, and 10,957 task flows. They were drawn across the seven core Fusion Apps as well as set-up/administration. Mr. Ellison showed the same or a nearly identical slide during his keynote.

The new design allows Oracle to present a single source of master data for customers, suppliers, employees, products, assets, locations, and financial and analytical data. It also enables developers to simplify and modify many of the business processes to improve the process or decrease the number of steps needed to complete a task. Mr. Miranda said early tests showed a 26% user productivity improvement.

Listening to the keynote, I kept waiting for Mr. Ellison’s barbed comments on SAP and Business ByDesign, but it never happened. In fact, the rare mention of its archrival mostly had to do with supporting Fusion Apps sales to the SAP installed base.

Internal rollout this quarter, general availability in 2010

The software went into code freeze and system test near the end of the 2Q09. Early adopter acceptance tests will be underway through the end of the year. At the same time, Oracle will be rolling out internal deployments of various SaaS modules. General availability is planned for next year, with most insiders hinting it will likely be in 4Q10.

At the briefing, Mr. Miranda described the early customer feedback as “overwhelmingly positive.” As mentioned before, Oracle validated the usability with more than 700 companies across 20 industries around the world. Half of these organizations also helped to validate the functionality and events across all the new modules.

The new software includes Web 2.0/social networking tools (such as presence/instant collaboration), tag clouds, ratings, RSS feeds, and communities. If you need to reach a colleague or find an expert, you’ll see his or her photo and related contact information.

Fusion Applications also include role-based dashboards, a new My Information navigation model, individual work lists, guided business processes, and contextual help.

In terms of net-new software, the talent management demo showed the ability to display the entire organizational chart, photos and contact information included. You can also show employee skills and attributes against the classic nine box grid. As you refine your search, employees are reallocated to the proper box.

The old Larry would have attacked SAP

Listening to the keynote, I kept waiting for Mr. Ellison’s barbed comments on SAP and Business ByDesign, but it never happened. In fact, the rare mention of its archrival mostly had to do with supporting Fusion Apps sales to the SAP installed base.

In the near term, Oracle has multiple advantages over SAP. For starters, the company is more comfortable selling modules, whether it’s a whole set of HCM software or just the new talent management module. One of the reasons SAP pulled back on Business ByDesign was that customers were buying only parts of the product and deploying them for fewer users than expected.

In addition, the same Oracle software can be deployed on premises, in the cloud, or as a hybrid. The full SAP Business Suite is only available on premises. Although an on-premises version of Business ByDesign is technically possible, the company is currently offering the software exclusively as on demand.

It will be interesting to see how SAP responds.

What do you think?

When do you think we’ll see the first Fusion Apps deals? If Oracle is successful ramping up sales next year, which vendors will it hurt the most? If SAP is your primary enterprise apps vendor, will you be willing to entertain a sales call from Oracle?

As always, I welcome your feedback and ideas— [email protected] . I’m sure we’ll continue this dialog on my blog, so be sure to stop by.
700+ companies that saw a preview of the product

[/ QUOTE ]
Out of all JDE Listers, has anybody seen it? Can't believe all 700+ were known SAP customers.
"Several of the logos were large SAP customers"

Not all of the 700 customers. A lot of SAP customers also run "best of breed" - and also run Oracle/JDE/PSFT for other divisions, so I'm not totally surprised. A preview of the product isn't really saying much either. In the words of Rod Tidwell "Show me the money"