Last year, Oracle executives laid out a lot of ambition and technical improvements in their technology and application stacks. They explained their plans for creating one of the biggest, single suites of application software to run in the cloud. And, they were going to put it all on top of purpose-driven servers, databases, etc. that would bring new levels of performance and security to their customers. Last year’s story was a great narrative but would Oracle achieve this anytime soon? Bravado, chest-thumping, etc. are legacy traits of Oracle, but would this story be one of timely substance?
The answers to many questions came last week at Oracle’s OpenWorld (OOW) conference in San Francisco. For Oracle application competitors, it should be a wake-up call. Whether you’re a gearhead or not, Oracle’s progress in creating a second generation of its tech stack is a reality. It’s not just a feeds & speeds point (although if even half of the claims made are true, then the performance gains are quite impressive); it’s also Oracle redefining how we should think of multi-tenancy, where database security resides and how it’s controlled.
While some of the competitive jabs were aimed at Amazon (specifically their AWS and elastic compute capabilities), the real targets Oracle is pursuing appear to be SAP and other ERP vendors.
What was on show?
Let’s summarize some of the announcements made at OOW before we look at the specific impact on the ERP application software space. Specifically, we heard:
- Oracle is connecting its product stack (i.e., its apps, security, analytics, infrastructure and database) to Microsoft Azure, VMWare and to a marketplace of third-party tools for OCI (Oracle’s Cloud Infrastructure). The Microsoft announcement is relatively new and many of the connection capabilities are still forthcoming. Businesses will be able to move data and compute loads between the two environments fairly painlessly. The VMWare deal allows firms to move more of their on-premises compute requirements to Oracle’s infrastructure. All of this shows Oracle’s recognition of the world being a multi-cloud multi-vendor world.
- Oracle is positioning itself as the leader in cloud applications and databases. Most of Oracle’s ERP competitors could barely claim any leadership in some application niche (e.g., back office), but the DBMS leadership space is unquestionably Oracle’s now. Yes, many other ERP vendors use open source databases, but no one other than SAP is trying to field their own database. (SAP has HANA and Sybase to utilize, but the non-ERP market adoption of HANA is negligible compared to Oracle’s at this time).
- Oracle’s claim to technical leadership in the DBMS space is multi-faceted. Oracle showcased its more nuanced and different approach to multi-tenancy. Specifically, its apps permit a separate logical, pluggable database for each tenant. The firm showed how it can natively support blockchain data/tables in its database. It also demonstrated support for micro-services, JSON (or XML), in-memory analytics, machine learning, extensible data lakes and an ability to contain multiple kinds of data in their single database product.
- Oracle’s next-gen analytic apps are now in-memory. Besides substantial performance improvements, the apps can be run in a variety of ways (in-memory columnar, in a data warehouse, combined row/columnar in the same database).
- Oracle’s Predictive Apps got new power, too. Many apps can access ML-based predictions. Several real-time recommendations, security and fraud detection notices occur via dozens of in-database ML algorithms. These algorithms can be extended via R and Python. Oracle’s Database 20C will support AutoML – machine learning for non-experts.
- Oracle’s applications are all connected via highly integrated process flows. This means no data redundancy or data silos in the suite.
- Oracle has invested in its Service Logistics apps. These include Customer Service, Supply Chain and Field Service application areas.
- Oracle’s CX Unity app/data solution is now available.
- Oracle claims its apps deliver a number of advantages, but a couple of these may really standout. Specifically, Oracle believes its apps offer “limitless scalability, bullet-proof security, comprehensive integration and next-gen technologies”. My assessment is that their security will be tough to beat. Also, their integration story across the suite would be hard for anyone other than Workday to match. However, Oracle’s suite breadth is now much larger than Workday’s. As to next-gen technologies, I believe that competitors will have a lot of similar capabilities in development but my clients are still looking for WOW factor advanced or reimagined capabilities to move from their vendor’s R&D labs and into general release.
- Oracle showed its new UX (Redwood). This UX isn’t just a User Interface. It’s a way for users to converse with an application suite. It’s quite different from many competing products.
- Oracle was not bashful in showing the number and size of customers using its Fusion Cloud applications. Interestingly, it indicated more are in process but since these customers are still de-installing competing products, these customers want to keep the news on the QT for a bit more. Add this to the slides showing competitive de-installs, it confirms the change in customer attitudes I noticed in my customer 1-on-1 interviews.
- Depending on the source, Fusion Cloud has over 6500 customers now. Add that to Oracle NetSuite’s 18,000 or so cloud customers and we’re starting to see big cloud growth for each suite.
- Oracle will push transaction process automation, recommendation/prediction functionality, a smart user experience and enhanced compliance capabilities in its app suite.
- Oracle is now offering SOAR – This is its fast implementation capability for helping existing on-premises customers (e.g., PeopleSoft) move to the Fusion Cloud apps.
- The Fusion Cloud apps are running on Oracle’s new Gen2 cloud tech stack.
I’m sure I’m only touching on some of the announcements and I probably missed several as I couldn’t get to every briefing. But the changes that Oracle has delivered (or will soon do so) are material and should create trouble for ERP competitors. In part two, I’ll take a closer look at the specific impact these and other application announcements will have on the ERP competitive landscape.