Ellison offers on-prem ERP customers "the last upgrade you'll ever do"

Denis Pombriant Profile picture for user denis_pombriant June 6, 2018
Oracle wants to get nervous on premise ERP customers onto its Fusion cloud apps with its new Soar initiative.

Larry Ellison Soar Launch
Migrating ERP systems is no walk in the park. Oracle Soar is there to change that with the launch of  "the world’s first automated enterprise cloud application upgrade product” aimed at getting nervous on-premise ERP customers into the cloud and accelerating the move to Oracle's Fusion offerings.

In a webinar pitch, Steve Miranda, Oracle Executive Vice-President of Application Development, articulated the problem:

In particular with ERP, many companies haven’t updated or upgraded their systems for maybe five or even 10 years, and sometimes even longer.

Hence, Oracle Soar. Initially the new program will help automate migration from Oracle E-Business Suite to Fusion ERP, but it is also available for migration from Oracle acquisitions PeopleSoft and Hyperion.

Oracle projects the conversion from E-Business Suite on-premise to Fusion ERP in the cloud will take 20 weeks in most normal circumstances. But then, compare that to the nail-biting, hair-pulling-out, heartburn-inducing, and angst-driven conversion of financial systems just before the turn of the century...

Of course there are a lot of steps to take here. Oracle's Chief Technology Officer Larry Ellison said:

Oracle has developed a set of analyzers that evaluate a customer’s E-Business Suite implementation for data, integrations, and customizations. It then orchestrates a migration plan that identifies tasks and makes assignments.

The company also says that many of the integrations and customizations that businesses have created over the life of their implementations have been replicated by Oracle in libraries that now make up standard parts of the Fusion products. Translation - you don’t give up your customizations and you don’t have to maintain them any more either.

Or that's the theory at any rate. The process won’t be perfect and Oracle has built in a services offering with 120 days of post-migration support and a year of extended support for the migration.

What's in it for me?

What's in it for customers? The prize being offered is that at the end of the process above you have yourself a fully functional cloud ERP (or Hyperion) implementation. The other big win, as sold by Oracle, is that you never have to do another upgrade again - which is of course a message we've heard for many years from Software as a Service providers, such as Salesforce and Workday.  Ellison said:

It’s now actually an easier upgrade to go from Oracle E-Business Suite to the cloud than from one version of Oracle E-Business Suite to another. Once you’re in the cloud, that’s the last upgrade you’ll ever do.

To sweeten the pill further, Oracle is arguing that users that migrate from on-premise E-Business Suite to Fusion ERP will also find a slew of new functionality awaiting them. This includes the security that comes with the autonomous database and machine learning to enable the system to “learn” a business and make logical recommendations as well as eliminate rote work that people now do, like some forms of manual data entry.

But also, and perhaps more importantly, there is a voice interface for developers and access to Visual Builder, the tool upon which Fusion ERP is built, to modify and enhance the implementation, and chat bot development. Finally, the system generates running code for handheld devices like phones and tablets.

My take

This is a significant move for multiple reasons including acceleration, cost containment, and automation. Oracle Soar will likely accelerate migration to the cloud by removing some of the concerns that many in the C-suite are likely to have about migration in general. They worry about the time and effort and thus risk to the business. If Oracle Soar works as advertised, and time will tell on that, those risks are being well mitigated.

It also appears the cost risk is being addressed too. In its presentation, Oracle stated that it aims to keep the cost of migration under twice the ARR of the software to be used. Again this needs proving, but it’s a stake in the ground and one that customers and commentators will return to.

Will Soar end the BYOL (Bring Your Own License) program? That was introduced to encourage customers to move their ERP licenses to Oracle cloud infrastructure, resulting in the same software running in a different location.

But with Soar, customers are being offered help for the migration and new functionality in a fully secure and cloud resident system that they no longer maintain, upgrade, and patch. BYOL will still be useful for non-ERP apps but it’s really a matter of time before it doesn’t matter. As Ellison recently noted that BYOL was slowing down cloud revenue growth, that's probably good for Oracle.

Finally, there’s so much automation involved that the process as outlined is another move towards further commoditization of IT. We’ve been looking at the impressive rollout of IaaS by numerous companies, which has led me to wonder about overbuilding. With Oracle’s announcement it’s highly likely that it will capture more of its legacy customers as cloud customers on Oracle infrastructure. This could be bad news for businesses that are primarily engaged in cloud infrastructure hoping to attract E-Business Suite customers.

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