The Oracle Application Suite – what’s old is new again (sort of)

Rebecca Wettemann Profile picture for user Rebecca Wettemann June 14, 2023
Summary:
Oracle's recent analyst day highlighted a 'One Oracle' strategy around its applications business.

Oracle

Remember when companies bought ERP suites to take advantage of a single integrated suite of applications but sacrificed best-of breed capabilities, and then key departments like sales, marketing, and HR went rogue and bought best-of-breed applications to fill in the gaps that then had to be integrated and managed? Oracle does, but today, it thinks you can have your suite cake and eat your best of breed too.

At the recent Oracle Analyst Summit, Oracle laid out its vision for Fusion enterprise applications: a full suite of line of business applications running on the same Oracle Cloud Infrastructure (OCI) and, of course, the Oracle database. Oracle’s pitch is that if you have all application running on the same infrastructure, with the same data model, business logic, and identity and security controls, you can drive down the cost of technology while increasing efficiency with end-to-end business processes.

Historically, Oracle has grown its applications footprint largely through acquisition, from ERP (PeopleSoft and JD Edwards) to CX/CRM and HCM (with Siebel, Eloqua, RightNow, Taleo, et cetera) and to industries (with Micros, Textura, and Cerner). In the CX space in particular, the company has often been criticized for having multiple applications that don’t necessarily work in an integrated fashion.

The good news is that now all of Oracle’s CX portfolio across sales, marketing, and service has been rearchitected to run on OCI with a common Redwood-based user interface (UI), lowering implementation and integration cost and complexity while improving performance.

The same is true for Oracle’s industry applications: Oracle says 96% of its industry clouds are running on OCI. That means lower initial and ongoing costs and a more predictable path to value. It also means Oracle has a differentiator that sets it apart from many of its peers, particularly in the CX space: an integrated end-to-end platform with a full integrated suite of line of business applications.

This means that companies choose to go “all in” with Oracle can take advantage of that integration, doing things like leveraging ERP data to identify and develop new leads and giving service departments real-time visibility into availability of parts for service.

On the human capital management (HCM) front, Oracle Me and Grow are also built from the ground up as Fusion applications with the Redwood UI; Oracle is in the process of migrating Fusion HCM to the Redwood UI and expects to complete conversion complete by mid-2023.

One-to-one vs lock-in

Beyond just talking the end-to-end talk, Oracle is:

  • Delivering applications that leverage its end-to-end platform to automate processes, such as integrated banking services with JP Morgan Chase, and integrated logistics with FedEx and other third-party logistics providers, so customers can access financial services or track shipments directly within Oracle Enterprise Resource Planning (ERP).
  • Investing in AI and ML both in its applications and its technology stack to drive greater efficiency and lower cost for customers.
  • Providing a single system, with one data model and business logic; the same identity, security, compliance, and auditing; one UX design system and UI components; and low-code tooling and development components and methodology that were used to built the out-of-the-box applications, for customers and partners who want to build applications on the Oracle platform.

What about vendor lock-in? Oracle argues that the “One Oracle” strategy is an engineering strategy, not a contractual or structural one, and that helping customers rationalize their existing application footprints helps them improve vendor management and reduce costs. It also says the Oracle has become a much easier company to work with as it has transitioned from a product company to a 100% services company. However, companies that have felt the sting of Oracle compliance audits in the past may need more convincing.

The CX team is betting that the one suite approach is more appealing than its competitors’ approaches that focus on a customer data platform (CDP) to unify CRM and external data to provide a complete customer view. The integration of back office and front office data to guide more informed lead qualification, guided selling, and more data-driven service is likely to be very appealing to Fusion ERP customers and prospects, but if Oracle is to compete in CX beyond that base it will have to innovate in providing CX capabilities that can differentiate their value beyond just the “One Oracle” story.

To that end, the CX team is branding new thought leadership around the need for big changes in CX. They argue that in the quest for hyper-personalization CRM has lost the plot, and that it’s the job of technology vendors to reduce the mess and noise of data that has become CRM and bring signals together in a more intelligent way. Oracle’s leading with rationalization, which is a smart move given the economic pressures driving marketers and IT to reevaluate their best- of breed saas strategy that has often resulted in multiple overlapping or under-utilized applications with integration and data provenance challenges.

My take

Oracle’s move to focus its CX strategy – and application strategy in general – on the strengths of one integrated stack with a common UI, business logic, and data model plays to Oracle’s strengths. While it’s unlikely to appeal beyond the Oracle customer base, that base is a large one. As organizations look to rationalize their CX application portfolios and get their data ready for AI initiatives, the vendor with a database at its core is betting that its integrated approach, a big investment in rearchitecting all its enterprise applications, and a serious data story will pay off.

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