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        Mark Smith's Analyst Perspectives

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        Cloudy Forecast for Oracle Fusion for CRM and HCM

        I did not go to Oracle OpenWorld this year because it seemed the company was fixated on appliances and technology with little  emphasize on its Fusion applications business, which the focus on business is a major interest of our firm. Based on the reports of my colleagues on its applications discussion (See: “Apps Hard to Find at Oracle Open World“) and Oracle Exalytics (See: “Oracle Unveils BI Appliance Called Exalytics“) and my review of Oracle’s online materials and keynotes, I was right to skip it. The week was full of diatribes about appliances and infrastructure, while applications played second fiddle. This is a longstanding imbalance for Oracle, perhaps understandable given its history and the need to build revenue from its expensive Sun Microsystems hardware acquisition.

        I was a lot more bullish in my analyses of Oracle Fusion CRM and Fusion HCM at last year’s Oracle OpenWorld. This year Oracle made the expected announcements of cloud versions of Oracle Fusion CRM and Oracle Fusion HCM as part of Oracle Public Cloud, but it showed a serious lack of enthusiasm and understanding of its own customers’ dilemma when it comes to getting to Oracle Fusion in the cloud.

        In Oracle Fusion HCM and what the company calls the Talent Management Cloud Service, Oracle has made a specific set of its applications available, including compensation, performance and analytics. You can access the cloud computing site for Oracle HCM and see that the developers are getting an onboarding experience started but still have some challenges to make it work. For instance, they provide little or no conversation about application and data migration from existing applications whether Oracle’s or someone else’s. No one can start from scratch anymore, so both preloading data and synchronizing it back across the enterprise are important issues. Workforce analytics are also weak, yet our research identified that 68 percent spent of HR organizations spend most of their time in data-related activities, so users need data integration that operates across and within cloud computing and enterprise environments. Oracle Fusion HCM provides little dialogue on how to address the dilemma of incorporating all employee data or promote the company’s own data-related technologies. Other providers that operate in the cloud might be a better choice.

        My latest review of the talent management advancements and business technology innovations that were unveiled at the recent HR Technology Conference confirmed that Oracle is just one of dozens of providers in talent management and one of the newest in providing it in the cloud. But then its archrival SAP is just coming out with its HCM applications for the cloud computing environment, too. Oracle will have to work hard to get the growth that CEO Larry Ellison no doubt expects.

        Oracle Fusion CRM and Sales Cloud Service show indications that the company is starting to understand that organizations need not simply SFA but a broad portfolio of applications designed for specific sales activities and processes. This should help Oracle advance in our assessment in our next Value Index for Sales. Oracle is already in a respectable position, but it can take a stronger one by getting more adoption of Oracle Fusion CRM.

        You can access the cloud site for CRM and see the same type of information as you’ll find for HCM. Considering the number of iterations of Oracle CRM OnDemand that have been released, the company should be more ready to help organizations get up and running – especially if it wants to compete against the latest from Salesforce.com and newcomer to the cloud SAP and its new Sales OnDemand offering.

        These Oracle Fusion Applications have promise, and though demonstrations are not accessible on the Internet, you can view some screen shots. Oracle has  considered usability, functionality and manageability by business. Now it’s addressing reliability and scalability across its public cloud environment, which remains to be proven. Oracle needs to better understand the existing cloud and enterprise data challenges to make its applications operational. Our business data in the cloud benchmark research found a significant challenge for organizations in their ability to use data across and within the cloud.

        I am not sure that business applications are a high enough priority for Oracle, and that goes double for cloud-based apps, which customers can rent from other providers today. I hope Oracle puts more effort into Oracle Fusion and its applications, especially its cloud computing editions. I think they have potential, but the company is not good at communicating their value. This problem seems to be getting worse even as Oracle has improved the user experience of the applications. I also continue to hear Oracle is one of the most difficult technology companies to work with.

        Oracle might consider adding an Oracle AppsWorld to get credibility and gain business attendance and attention; that could lead to customer and business growth. Once Oracle gets fully serious about business applications – and about its customers for them – it will find itself more often on the short list of vendors to evaluate. That won’t happen immediately, as in many cases Oracle is currently left off the list and rightfully so by potential customers evaluating HCM or talent management along with CRM and more specifically Sales in the cloud today.

        Regards,

        Mark Smith – CEO & Chief Research Officer

        Authors:

        Mark Smith
        Partner, Head of Software Research

        Mark Smith is the Partner, Head of Software Research at ISG and Ventana Research leading the global market agenda as a subject matter expert in digital business and enterprise software. Mark is a digital technology enthusiast using market research and insights to educate and inspire enterprises, software and service providers.

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