Profit Opinion

John Matelski- May 2007

CIOs are used to vaporware—it is, of course, an occupational hazard when dealing with the folks who bring us software. But some vaporware provokes a queasier feeling than others. It's one thing to wait for a tardy upgrade or software release. It's another thing altogether to wait and wonder when the outcome affects the future of an entire software platform.

All this brings me to Oracle's announcement at its Applications Unlimited event, on January 31, of upgrades to the multiple software platforms that will ultimately merge into Oracle Fusion. When Oracle first announced Applications Unlimited a year ago, it was terrific news to the users of Oracle's JD Edwards, Oracle's PeopleSoft, Oracle's Siebel, and Oracle E-Business Suite, who were wondering about the future of their software. But while the original announcement was great, it was still vaporware until we actually got a product. (I'm a JD Edwards customer who has gone through the tumult of the company's acquisition history, so I was a little wary, and I watched and waited.)

Now, a year later, Oracle has honored its commitments and met its timelines—and that says a lot about Oracle's commitment to its customer base. Quite frankly, it's alleviated a lot of the trepidation that I had, and it's enhanced the level of trust. There are always the cynics who look at Applications Unlimited with suspicion—the skeptics' party line is that putting such an effort into Applications Unlimited means that Oracle is not sincere in its commitment to Oracle Fusion and that the company is diluting development resources by committing to both initiatives.

But most of the Oracle customers I've spoken with see this as a no-brainer—in order to keep customers happy and current on its platforms, Oracle had to do this. The International Oracle User Council, consisting of the eight recognized umbrella groups, met the week before the Applications Unlimited product releases, and it's clear that there's a great deal of excitement in the global user community. (The JD Edwards World community in particular is in seventh heaven—they've had a long wait.)

What's even more satisfying is that the upgrades are substantial. When Applications Unlimited was first announced, many customers thought Oracle would throw in a little of this and a little of that and put out a lipstick upgrade. Instead we've been given significant upgrades and functionality. What this offers me as a CIO is the gift of time and the freedom of choice. I am a JD Edwards EnterpriseOne 8.10 customer, and, looking at 8.12, I see some wonderful enhanced reporting capabilities and some Oracle Fusion Middleware built into the application that might provide me with some benefits. If we tie the functionality to business value, it's a realistic option for us. It gives me the freedom to watch the progress on Oracle Fusion, and perhaps wait a release or two to migrate, without having to worry about being frog-marched over to the new platform or having to survive with inadequate technology.

To be fair, Oracle is getting its share of benefits from delivering on Applications Unlimited. They preserve a much broader customer base to which they can deliver Oracle Fusion, since there's a good chance that a fair chunk of the "legacy" platform clients might pursue other vendors if the wait for functionality were to last until Fusion appeared.

There's no question that Oracle wants to eventually move to a complete red-stack solution, which would be Oracle Fusion. At some point, when the majority of customers have migrated to the new platform, they are going to have to pull the plug on these existing applications, as they obviously can't support them forever if they are experiencing a financial loss. But the bottom line here is that any software company has to maintain customers in the short term while implementing the long-term vision of its product, and to my mind, Oracle is doing just that. By coming to the table with Applications Unlimited, Oracle can say, "This no longer just sounds great. It's here, and it is great." And despite the short-term hit Oracle will take on development costs, it'll pay off in customer loyalty. In the long run, that helps everybody.

John Matelski is chairman of the International Oracle User Council (IOUC) and immediate past president and member of the board of directors of the Quest International Users Group. He has been chief security officer and deputy CIO for the City of Orlando, Florida, for the past nine years.


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