Thursday, May 31, 2012

Oracle Applications in the Cloud - Fusion

One of the news worthy item today was Oracle plans new cloud-based products, first Ellison tweet
Larry Ellison will do his first Tweet in early June to mark the announcement of the new Cloud based offerings from Oracle. Today web based software accounts for $1 billion or so in revenues for Oracle. I noted Tom Kyte (@OracleAskTom) recently started tweeting as well!

There was an article recently in Computerworld Why Oracle Fusion Apps customers overwhelmingly prefer cloud deployment  where Oracle Fusion Applications customers have shown interest in the hosted applications by Oracle. Most of the early Fusion Application customers are on the "Cloud for the initial years. I understand, this frees the customer from the worries of infrastructure for this new technology and worry on the business adoption of the Fusion Applications as it gradually replaces Oracle E-Business Suite, JD Edwards, Peoplesoft and Siebel Applications. This is the SaaS or the Sofware as a Service model for delivery of business applications. One of the advantages of SaaS model is to let the vendor worry about the high availability of the application. Personally, however, I have seen issues with the performance when the infrastructure is remote or with Oracle on Demand (OoD) which is being re-branded as Oracle Cloud. My understanding is customers will get a license credit for the application they own today as they move to the Fusion version. So for instance if you have core HR today say in EBS and you move to Fusion apps, then you get the core HR license credit but pay for anything additional you use say Talent Management.

Interestingly, though Larry Ellison said that Oracle aims to dethrone IBM in business hardware  so  I am wondering how the the two trends re-concile?  If SaaS (Software as a Service), is the future direction for the delivery of the business applications (like SalesForce.com), then sales of business hardware will be targeted not at the end user companies, rather to the data center providers. In case of Oracle Cloud, it would be a large consumer of hardware itself for the Cloud based user base. Amazon EC2 and IBM SMARTCloud would be other such examples where the business application is not primarily provided by the Cloud provider.

While, it sounds good in principle, we need to see how fast the real world adopts Fusion Applications to replace the EBS/JDE/PSFT/Siebel types of applications and if they do, will customers still prefer Fusion apps running on the premise or put it on the cloud?

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