Analyst Commentary: Oracle clarifies its Cloud strategy
May 20, 2012
Grazed from BusinessCloud9. Author: Stuart Lauchlan.
Oracle was relatively slow to recognize the importance of Cloud computing, as members of its surprisingly frank customer panel pointed out during the recent analyst event. However, these customers also agreed that Oracle has finally got its act together. The company’s overarching marketing message for 2013 of “simplify IT” and “power extreme innovation” is a good fit for its expanding Cloud strategy.
Oracle was relatively slow to recognize the importance of Cloud computing, as members of its surprisingly frank customer panel pointed out during the recent analyst event. However, these customers also agreed that Oracle has finally got its act together. The company’s overarching marketing message for 2013 of “simplify IT” and “power extreme innovation” is a good fit for its expanding Cloud strategy.For Oracle, Cloud Computing, among other themes, is the focus of a series of high-level “business transformation” marketing campaigns. Oracle is right. It needs to emphasize the transformational effect of Cloud Computing. However, instead of focusing too much on technology, it should do more to explain how it can help customers go through this transformation. It should also lead by example, and it would be good to know more about the way in which Oracle itself is coming to terms with Cloud Computing…
An expanded public Cloud is soon to be released: Oracle provided more details about its public cloud, which is expected to be commercially available by mid-2012. Ovum also expects upcoming announcements about extensions to Oracle’s PaaS and SaaS portfolio of services. The breadth and depth of its vision is such that, should it prove successful, Oracle is likely to become an influential public Cloud market-leader, at least to start with within its customer base.
Adoption by existing Oracle customers is likely to be slow at a SaaS-level, as pointed out by the November 2011 OAUG (Oracle Applications Users Group) survey on application upgrade strategies. This survey indicated that only 4% of the 80% of the 327 respondents conducting or planning an upgrade had plans to move to a SaaS offering. By contrast, 71% planned to remain on-premise. Application hosting proved more popular than SaaS, with 14% planning to remain hosted and 9% planning to move to a hosted environment. Indeed, as previously pointed out by Ovum, discussions about Cloud in general, not just SaaS, often lead to renewed interest in hosting solutions.
A March 2012 OAUG survey on application delivery strategies also reflects the appeal of hosting services. In addition, it paints a brighter picture when it comes to the adoption of Cloud computing in general by Oracle application users. Of the 364 respondents, 29% plan to move to private clouds and 17% to public clouds in the next 12 months.
From SaaS to BPaaS: Oracle has moved beyond SaaS into business process-as-a-service (BpaaS) territory. Ovum does not define BPaaS as “outsourced SaaS” (SaaS used by a service provider on behalf of a third party) but as an inter-application process-centric extension of SaaS. For example, under the “B2C customer experience” marketing banner Oracle focuses on the integration of Oracle WebCenter Sites, Oracle Siebel Marketing, Oracle Endeca, Oracle ATG Commerce, Oracle Financials, Procurement, and Supply Chain, as well as Oracle RightNow CX Cloud Service to achieve a consistent and personalized experience across all channels. The company takes a BPaaS approach not only to B2C but also B2B customer experience, as well as human resource management (HRM), enterprise resource planning (ERP), and supply chain management (SCM). In addition to the original CRM and HRM components of Oracle Public Cloud, Ovum expects the ERP components (SCM functionality included) to go live to customers by early summer 2012.
Once the BPM component of Oracle Fusion Middleware offering is added to Oracle Public Cloud, this inter-application-centric approach will be strengthened by a new development: Oracle process accelerators. The first two accelerators, Travel Request Management (TRM) and Document Routing and Approval (DRA), shipped in early May 2012. They are built using Oracle BPM Suite, leveraging other Oracle solutions and applications as needed by the business process being supported.
Developer-centric PaaS: At a PaaS level, Oracle plans to deliver a cloud-centric application lifecycle management (ALM) environment with integrated task/defect-tracking, source repository, build facilities (Hudson with rules for promotion), and IDE Integration (Oracle JDeveloper, Eclipse, NetBeans). This is not a new idea and is akin to VMware’s Code2Cloud approach. In addition, the service is not yet available. It is nonetheless a positive development. We expect more SaaS-based ALM functionality as well as more services that will help developers run their business, not just their applications, on Oracle Public Cloud. The company is already offering payment services and there are talks of a marketplace.
Data services: Like the rest of the industry, Oracle is talking about the need to cater for web, mobile, and social applications, and is positioning its public Cloud as a key enabler for all of these and hybrids thereof. It also understands that public clouds not only deliver infrastructure (compute, storage) and software resources, but also data resources. Potentially, it has all the components for a data-centric approach to Cloud computing, but its data-centric message is currently not as integrated and articulate as it should be. We expect more synergy between its Big Data and Cloud computing plans, and more details about the way Oracle plans to support a supply chain of data providers and consumers. We also expect more details about the way in which Oracle itself is going to use the data collected by its SaaS applications to create benchmark-type offerings.