In the world of high-tech product announcements, Jan. 18, 2006, seems like an awfully long time ago. On that date, Oracle executives, including President Charles Phillips, boasted that they were halfway through the Oracle Fusion Applications development process.
Fusion Apps was envisioned and pitched as a killer enterprise application suite: a combination of the best features and functionalities taken from Oracle's expansive E-Business Suite, J.D. Edwards, PeopleSoft and Siebel product lines.
Oracle's master plan, noted Phillips, was to "build the next-generation of applications that are completely standard; to be the first company on the planet to build a full suite of applications for large and small companies based on standards."
Almost three years later, the planet is still waiting for the first generation of Oracle's suite of Fusion Apps.
Was Oracle too ambitious, on a technology level? "The delay is not all that surprising given the scope of what Oracle is attempting to undertake with Fusion Apps," says Dwight Davis, a senior analyst at Ovum. "There's just so much that Oracle has taken on its plate with Fusion: It's not just SOA; it's Web 2.0, integrating business intelligence as sort of a pervasive element of Fusion Apps. They're making a clear shift from siloed applications to focusing on more end-to-end business processes that flow across the modules."
In addition to the technical complexities of the last few years, two notable Oracle executives have left, casting a dark cloud over the Fusion project: SVP of Oracle applications John Wookey departed in October 2007, and Jesper Andersen exited in late summer 2008. Andersen was known internally as "Mr. Fusion."
"With Fusion," Davis says, "given the ambitious nature and the scope-how it's looking to be all things to all technologies-makes it quite a daunting undertaking."
But some other analysts say that Oracle has seemingly been talking the talk and not walking the walk. "This was bigger than Oracle thought in the first place," says Yvonne Genovese, a VP and analyst at Gartner. The fact that Oracle has acquired dozens of vendors' product sets over the years, including the recent BEA deal, and that Oracle wants to include those products' features into the Fusion Apps, which could change its underlying architecture, makes finishing Fusion Apps that much more complicated.
"It's difficult to build on a moving target," Genovese adds.
What's the Real Holdup, Larry?
Industry speculation as to why the Fusion Apps Suite hasn't been released abounds, mostly because Oracle executives have been so tight-lipped about the product set for so long. At the OpenWorld 2008 show in September, for instance, CEO Larry Ellison spent hardly any time discussing it.
However, Steve Miranda, Oracle's SVP of Fusion application development, told IDG News that the first Fusion Apps suite of products might not be available until 2010. "We're going to be with early customers at the end of next year, and we're going to be very, very cautious on the [general availability date]," Miranda said, while at the show. "We're going to make sure [the applications] are successful. Period."
Oracle execs like to note that they have delivered some applications that are based on the underlying Fusion technology. Those releases, however, are only a couple of CRM-related offerings, such as Sales Prospector, a type of data-mining app for salespeople.
Albert Pang, IDC's director of enterprise applications research, says that "delays" is not the correct way to characterize Fusion Apps' delivery problems because Oracle has brought to market some product and is close to shipping some others. "I think it's the perceived delay that people are thinking of because Oracle has been talking about these Fusion applications since early 2006," he says.
According to Ray Wang, VP and principal analyst at Forrester Research, a large part of the delay stems from internal quality control and user acceptance testing. Oracle, he says, has had feedback on live code from customers, perhaps as many as 350. At OpenWorld, Oracle's Miranda said that 700 customers had been participating in three years of Fusion Applications research, including Coca-Cola, FedEx and Target.
Only Fools Rush In
One possible contributing factor to Oracle's lack of speed is that there appears to be no good reason for Oracle to trot out a "next-generation" applications suite, which might have bugs and architectural problems, to a customer base and marketplace that's really not looking for next-gen horsepower right now. (Oracle spokesperson Deborah Hellinger declined to comment or make a Fusion Applications executive available for this article.)
Pang notes that the priority right now for Oracle "is to steer the majority of Oracle E-Business Suite, PeopleSoft Enterprise and JD Edwards Enterprise One customers to run on the most current releases," he says. "Once they are on the latest releases, it would be an easy task for them to incorporate the Fusion Applications modules into their current environment either through on-demand or on-premise because of the co-existence principle of Fusion."
Jim Shepherd, senior vice president of research at AMR Research, says Oracle realized that there was no overwhelming demand in the market for a next-generation ERP system, and "most of the acquired PeopleSoft and J.D. Edwards customers were much more interested in enhancements for their existing software than they were in migrating to a new product." In turn, Oracle has lowered the priority of delivering Fusion Apps to the market.
"I don't think there has been any downside to the delay of Fusion," Shepherd adds.
Besides, says Ovum's Davis, the enterprise customers aren't ready for it anyway. "Even if Oracle got everything out in 2009, would the market be ready to shift over that quickly to it?" he asks. "I doubt it."
Oracle has enjoyed exceptional financial returns in 2008, especially given the state of the economy. Many of its customers, which have been pouring maintenance dollars into Oracle's coffers, might not be as fiscally sound as Oracle right now-another factor that could have caused Oracle to pull back on the plans.
And lastly, there's also no looming competitive threat forcing Oracle's hand. "If you look at what SAP and Microsoft are doing with their next-generation applications, then you have to say that [Oracle] is not under any incredible pressure from competitive sources to get their Fusion Apps together that much faster," Ovum's Davis points out. "It's not like if they're not out by 2009, SAP and Microsoft are going to leave them in the dust."
Can Oracle Distance Itself from SAP?
Oracle's Fusion Apps delivery approach will be less a big-bang announcement and more a phased, piecemeal unveiling of applications, like those for project management, business intelligence, HR and supply chain management, say Oracle execs.
In the end however, some industry analysts and Oracle watchers believe that when Oracle does deliver on what it has promised with Fusion Apps, that it could change the landscape of enterprise software.
"Should Oracle succeed, they will create a significant gap in the enterprise applications space between Oracle and SAP," says Forrester's Wang. "The analytical dashboards and push-driven screens are quite significant. The thoughtfulness in how information is consumed and delivered is extremely significant."
IDC's Pang thinks Fusion Apps' ability for customers to run applications both on-premise and on-demand and its co-existence capability (to run Fusion applications along with existing E-Business Suite, PeopleSoft and JDE) "will be a game changer."
Other analysts, however, disagree. While AMR's Shepherd thinks that Fusion's promised advanced functionalities (such as Web 2.0) and underlying technologies (SOA and business process modeling) will be significant, they will not add up to a game change "because Oracle has a very good product line today, and the ERP market doesn't change that quickly," he says.
Gartner's Genovese also remains unconvinced. "The product, when delivered, will be very generic," she says. "It might cause some technology excitement in the beginning, but it is going to be hard for customers to justify a completely new product that doesn't provide business based ROI over their current solutions."
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