As Published In May 2007

Oracle Fusion Forecast

With the announcement, earlier this year, of major upgrades to all five of Oracle's applications product lines, some customers might be wondering if Oracle still has a strong commitment to Oracle Fusion. But any doubting customers haven't listened to Jesper Andersen lately. Tasked with plotting strategy for Oracle Fusion, the senior vice president is adamant that the level of focus, effort, and intelligence being exerted on Oracle Fusion has, if anything, redoubled as the company moves toward the product's release.

PROFIT: Can you define Oracle Fusion and update us on what's been happening during the past six months?

ANDERSEN: Oracle Fusion is the next generation of Oracle's business applications. We are committed to delivering an industry-leading next-generation applications suite and we're re-emphasizing why we think there is a need for a natively built next-generation suite and educating the market on the key concepts behind it. We are showing customers tangible aspects of the product, such as the user interface experience. We're in the functional design stage, we've rolled out the standardized development environment—we're executing well against our plans.

PROFIT: How will Web 2.0 impact Oracle's applications?

ANDERSEN: Web 2.0 emphasizes collaboration—it really takes a lot of concepts from Web sites like Google and MySpace, and from instant messaging and things like that, and incorporates those into applications. It's more of a consumer phenomenon today, but we believe it will have a significant impact on the enterprise. Oracle Fusion Middleware and Oracle technology provide a lot of those capabilities for our existing applications, and Oracle Fusion applications will go further to natively incorporate Web 2.0 concepts.

We have a great search engine. We have good collaboration technology. We have everything we need around those things. And some of that we can bring to the applications incrementally, but other things require more of a fresh approach. That's why we are doing Oracle Fusion, to make sure we take advantage of all of those things and offer our customers the productivity and business process gains that that new technology base can help deliver. We want to ensure that we get a service-oriented architecture-based application suite. Architecting specifically with that in mind is a key concept and a key focus point in Oracle Fusion.

PROFIT: What role are standards playing in the development planning?

ANDERSEN: When we think of Oracle Fusion, we think of what we call the superior ownership experience. The superior ownership experience includes user experience, partner experience, application management, and total cost of ownership. We believe that standards are a requirement to providing a superior ownership experience because standards reduce the cost of ownership by providing access to greater resources and ensuring commonalities that facilitate integration and extensions.

PROFIT: Can you define the "superior ownership experience"?

ANDERSEN: The superior ownership experience is core to what Oracle strives to deliver to its customers. We need to put better decision tools in the hands of the end users. We have done a great job of automating business processes in the past, but we—the application industry in general, not just Oracle—haven't necessarily done a great job embedding business intelligence, so that people have all of that information right at their fingertips in the context of a transaction when they're using the application. That's one example of what we think of as the best user experience from a usability perspective. Obviously, we intend to leverage Oracle Fusion Middleware to its fullest and to use the great extensibility that Oracle Fusion Middleware gives us. That is very important for partners and for customers.

PROFIT: Once a customer is sold on Oracle Fusion, what should they be thinking about in terms of a migration strategy?

ANDERSEN: We are gearing up investments significantly in what we call the Oracle Fusion upgrade strategy. I want to emphasize that it's not a big bang. It's not a question of, "Oh, Oracle Fusion covers all of these different business processes, so you must retire any and all systems that you have today in those areas." That was never the intent. We intend to support what you could call the PeopleSoft pillar strategy of having financials and HR in different systems, or different instances, if you like.

Yet at the same time, we don't want to lose the Oracle E-Business Suite advantage, which allows our customers to consolidate their systems into a single instance. We are going to allow customers to choose between these deployment strategies. We know that some people will adopt Oracle Fusion across a wide range of applications and use it as an opportunity to retire a number of legacy systems. Others will use Oracle Fusion more as a point solution in select areas.

PROFIT: To what degree would you say that Oracle Fusion will be a new thing and to what degree will it pull in the best features and processes and functions from the other lines?

ANDERSEN: It is absolutely leveraging the best thinking and experience of all lines. We're starting with the Oracle E-Business Suite as the basis, because, frankly, it's the best foundation. It's not because Oracle is the origin. Oracle E-Business Suite is built on a more-complete data model and it's the system that is closest to being developed using standards—it's predominantly coded in Java, for example.

PeopleSoft and Siebel are great products, but with proprietary toolsets. Despite that, the CRM [customer relationship management] starting point for Oracle Fusion, from a data model and business logic and functional behavior perspective, is more like Siebel than Oracle E-Business Suite. That's what we mean when we say we're using the best of the best. Siebel 8, which we just released, introduced a task-oriented user interface where you can follow a flow of tasks through the application. JD Edwards is another great example—it's the world's leading SMB [small and medium business] suite of products. And the JD Edwards team has done a fabulous job over the years of lowering the cost of ownership.

PROFIT: What do you think is going to be the big motivator to make customers move to Oracle Fusion?

ANDERSEN: That will differ for different customers. A lot of customers will like the user experience and benefits such as business intelligence in the UI [user interface]. The UI drives a lot of decisions around upgrades. If customers feel that tasks are easier, that can save lots of hours over a year for the end users.

Also, there are a lot of customers, particularly in industries like financial services and telecommunications, who are very, very keen on service-oriented architectures and who already are investing very significantly in that area. They will adopt the components and applications that are part of Oracle Fusion that they feel are most important to their business. Oracle Fusion will, like any other new set of products, follow a normal, bell-shaped adoption curve. There will be early adopters and there will be laggards. There will be early adopters from a technology perspective, from a functionality perspective, and from a usability perspective. And then there will be laggards, customers who are happy with what they have.

PROFIT: What would you say is the biggest difference between what Oracle offers and what our competitors offer?

ANDERSEN: I would say the biggest difference is that no other company is committed, the way we are, to building a 100 percent standard set of applications such as we will with Oracle Fusion. So if standards matter to you as a company, and if you believe in our vision around a superior ownership experience, then standards are very important.

With respect to SAP, their strategy is different. It's actually a little confusing, I would say, for many customers. They have their existing applications, what they call MySAP, and they've said, "Look, we just released MySAP 2005. That will be a stable platform, at least until 2010, and we really don't intend to do a lot to that." So customers know they're not going to get a lot of new functionality in that area. SAP really hasn't talked a lot about their vision of the future. There have been various secret projects, like Project Vienna. They just rolled out something new called A1S, which supposedly is software as a service for the midmarket. Although they announced A1S toward the end of last year and planned release for first quarter of 2007, they have since delayed that release and changed their launch plans. They also haven't done a satisfactory job of explaining what to do if you're an All-in-One customer, which is their current midmarket product. They've said nothing about upgrades. They've said nothing about whether they would even support a license-to-license move over to A1S. So I am hearing a lot of SAP customers say that they are very confused at the moment. They really don't know how to look at the future.

That's a big difference between SAP and Oracle. We are very clear with our customers about what we are doing and how we will support whatever technology strategy is right for our customers' business. We have Applications Unlimited today and we are building Oracle Fusion for the next generation. You can stay on your existing applications and continue to get new releases that are loaded with customer-driven innovation and leverage next-generation technology, or, when it makes business sense for you, we will provide an upgrade path to Oracle Fusion applications. You can't be more clear than that. That's what we've told our customers and that's why customers like our strategy.