Manufacturing Executive - March/April 2009 - (Page 26) Oracle officials, while continuing to insist that the Fusion Applications plan was still in place, stopped talking about specific availability dates. Wookey left Oracle, later to surface at SAP. And the 2008 deadline for releasing a full suite of Fusion Applications came and went without so much as a public peep from Oracle headquarters in Redwood Shores, CA. (Oracle declined requests for interviews about Fusion Applications for this article.) Analysts who have been briefed on Fusion Applications now expect that a relatively complete suite won’t appear until late 2009 or early 2010 and that the much touted product won’t significantly impact the enterprise applications market until well into 2010, more than five years after Oracle unveiled the initiative. And, say customers who have seen demonstrations of Fusion Applications, the initial release won’t include a new core manufacturing module. “It’s quite evident that Fusion will be quite late, “ They finally woke up to the fact that by talking so much about Fusion Applications, they were scaring their customer base to death. Research Vice President, AMR Research which is not that surprising,” says Bob Parker, group vice president at IDC Manufacturing Insights. “Three years ago, when they started laying out their plans, we said there was no way they would finish on time.” The delay has complicated life for many of Oracle’s customers, which must decide whether to upgrade to the latest versions of their existing products, such as Oracle’s E-Business Suite 12, or wait for Fusion Applications. The delay has also given Oracle competitors a chance to paint Fusion Applications as a risky, unproven option for customers, many of which are becoming increasingly risk-averse in the worldwide economic slowdown (see sidebar, p. 27). However, even with Fusion Applications missing in action until a date uncertain, the outlook for Oracle’s applications business is not at all bad. Many customers say they are still very interested in migrating to Fusion Applications when it arrives. Analysts and customers who have been shown Fusion Applications so far say they have been impressed, particularly with the product’s advanced user interface and embedded business intelligence features. And even with questions looming over Fusion “ Jim Shepherd Applications, Oracle has managed to gain applications market share in recent months by winning new customers to its current products and selling acquired best-of-breed applications, such as transportation management tool G-Log and demand planning application Demantra, to existing application customers. Over the past three years, Oracle has grown applications revenue from licenses, maintenance, and subscriptions by 33% per year. While rival SAP still enjoys a large applications market-share lead, its revenue from licenses, maintenance, and subscriptions has grown more slowly at 20% per year over the same period, according to a recent report by Forrester Research. In fact, experts say, the success of Oracle’s strategy for maintaining and enhancing its current applications — EBS, PeopleSoft, JD Edwards EnterpriseOne and World, Siebel, and others — has likely played a role in the Fusion Applications delay. Initially, after acquiring PeopleSoft and JD Edwards, Oracle officials committed to enhancing and supporting existing applications only through 2013, a development that concerned many manufacturing customers, which tend to hang onto their applications for 10 years or longer. In spring 2006, however, Oracle announced a change in strategy, dubbed Applications Unlimited. The company promised to maintain and extend existing applications indefinitely “as long as they remain viable.” And Oracle kept its word, rolling out promised new releases of applications, such as Siebel 8.0, JD Edwards 8.12 and 9, and PeopleSoft 9.0. Customers were relieved, and many revived dormant upgrade plans. “We’ve been pleased with Applications Unlimited and with Oracle’s acquisition of applications, like Demantra, which fit the CPG space we are in,” says Ray Gosselin, director of ERP solutions at food and beverage manufacturer Welch’s. Welch’s deployed EBS 11.5.9 in 2004 and upgraded to 11.5.10 in September 2008. The company has also deployed Demantra. With Applications Unlimited finding favor among customers and the applications business growing, suddenly Oracle’s immediate need for Fusion Applications became much less urgent, experts say. In fact, Oracle executives realised that focusing too much publicly on Fusion Applications could undermine the Applications Unlimited message — that Oracle was committed long-term to its existing application products. Also, by focusing too much on Fusion Applications as a fully integrated suite of next-generation products, Oracle ran the risk of jeopardising its efforts to cross-sell newly acquired best-of-breed products, such as Demantra and G-Log, to existing customers. “They finally woke up to the fact that by talking so much about Fusion Applications, they were scaring 26 Manufacturing Executive MAR/APR-09
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