Posts Tagged ‘Oracle CRM’


With Oracle’s announcement of Fusion applications, you can make a reasonable case that Salesforce.com has won an important ten-year old argument about the future of the software industry.  Notwithstanding SAP, the only significant outlier left, Oracle is the last major software company to adopt on-demand computing as a centerpiece thus awarding legitimacy and critical mass once and for all to the idea.

Amen.

But the Oracle announcement says more about business models than technology paradigms and at the model level it is not clear that Salesforce has won.  Salesforce CEO Marc Benioff’s vision of business applications delivered over the internet has won an important victory but the business model — subscription services — that makes this technology the center of the movement and exclusive delivery mechanism has not eliminated all competition.  Not yet, at any rate.

The reasons are simple enough, market reticence generated by concerns — both real and imaginary — about security or the viability of the technology model still hamper full adoption of the business model.  As a result, companies as diverse as Oracle, Microsoft and Sage have hedged their bets by offering technology that can be implemented in numerous ways including on-demand as well as by conventional deployments.  As a result vendors have effectively thrown the business model decision over the wall to the customer.

With software capable of, shall we say, polymorphous deployment, the ultimate decision about how to deploy now becomes the exclusive province of the customer as the vendors have now turned into Solomon or, in a modern interpretation, Burger King.  Customers are completely free to have it their way or ways.  They can deploy business applications in a fully SaaS configuration or in hybrid ways that are to a lesser extent owned and operated by the IT department.  As I have noted before, this is typical transition state behavior of vendors straddling two diverse paradigms.

It is no surprise that adoption of the business model lags adoption of the technology.  It has always been true that conversion from traditional software licensing to SaaS is a big step and one that for many software companies could lead to financial ruin if not handled expertly.  More to the point, there are customers who, for reasons of security, custom and preference believe that SaaS computing is not for them, at least not now.

So it is no surprise therefore that the most successful SaaS companies are those that, like Salesforce, grew organically from on-demand roots.  Other successful SaaS companies like Oracle bought their way into SaaS computing, a time honored tradition when adopting new models.

Even before Oracle’s Fusion announcement at Open World this month, the company had been a player in SaaS based CRM with Oracle CRM On-Demand due to its earlier acquisition of Siebel Systems.  But it remains to be seen if any software vendor can fully realize the benefits of SaaS — and now Cloud Computing without full emersion into the technology model.

One of the most powerful aspects of SaaS computing is not the idea of subscriptions or even Internet delivery but of a single version of the applications supporting all users.  With a single version of the code, all users have the same foundation on which to configure, modify and build new applications.  The single code set — also called multi-tenant architecture — makes it hugely unlikely that any two independent software makers would develop incompatible applications and therein lays the power of the business model.

This single idea makes it highly likely that applications built to the standards of the foundation — or platform as we like to call it — will be able to inter-operate.  Take this standard away and you have the same Babel of competing standards and proprietary designs that have been the bain of the software industry.  There is a cost associated with this lack of standardization and software customers have been paying it for decades — with rising resentment.

That cost is not measured strictly monetarily; there is opportunity cost involved too.  When everyone played by the same conventional software rules the opportunity cost problem was equivalent to a farmer experiencing bad weather.  But SaaS computing eliminates the weather variable giving a big advantage to companies under its umbrella.  So it is ironic that the decision about adoption is still left to taste.

With most of the hybrid products, the same code can be deployed in a conventional multi-tenant way or as a standalone system behind a traditional firewall.  The segregated system becomes a unique instance the moment a developer modifies the platform.  Doing that makes the idea of standards a waste of time.

But for the time being — and I am still calling it a transition state — we can expect to see a lot of deployments in which the software is SaaS ready but the deployment is decidedly twentieth century.  In the next five to ten years we will see examples of companies trying to back out of their proprietary SaaS-like systems to finally get on board with SaaS or Cloud Computing.  It will all have been avoidable and it will be good business for software consultants.

As Kurt would say, “So it goes.”

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Fusion is big, potentially powerful, based on new technology, backward compatible and not available yet.

Larry Ellison began taking the wraps off Fusion at his Open World keynote on Wednesday.  His appearance on Sunday with Sun CEO Scott McNealy was just for poking some fun at IBM, this was the real deal.  Fusion is a big idea and this post will leave something out – that’s a given – but here are some important impressions.

There are ten applications and I don’t write fast enough to have copied them all down from Larry’s slide.  For sure there was CRM but also GL, Deal Management, Territory and Talent Management too.

The applications are based on SOA architecture, the UIs have embedded BI.  There are six thousand database tables, 6,500 objects, 20,000 views, 10,000 task flows and the applications are code complete and being tested by customers.

Fusion is based on industry standards like JAVA Fusion middleware which Larry said is the first such deployment.

Fusion applications are scheduled to debut next year and while that is a little disappointing it is entirely in keeping with the purpose of a keynote – forward looking statements right?  Ok.

I saw some demos but as I said in a previous post, I want to see a birth certificate.

Fusion applications are modular and they are designed to be deployed as full replacements for other older Oracle products.  Modularity enables them to also work side by side with existing applications so that there is no need for a wholesale replacement.  There are also new applications that have no analogs with the older product suites so it is good that Fusion and legacy applications can work together.

Like a lot of CRM products coming out these days, the Fusion applications, based on a SOA architecture are intended to operate behind your firewall in a single tenant manner or at some other data center in either single or multi-tenant mode.  This approach neatly straddles the diverse deployment options that some people feel they need today and gives a company like Oracle the flexibility to support all of them with one code set.  This neatly solves the problem of how to convert Oracle’s product set from premise-bound to cloud resident by leaving the decision to the customer.  That’s good, fine even and it does a lot to close the discussion about on-premise vs. on-demand, or does it?

The trouble with running a private cloud is that as soon as I make a modification to the system I might be making the product unique and unsupportable putting me back into the same version conundrum that many hope to avoid.  I need to know more about this.

Interestingly, in no demo did anyone talk about Fusion code or coding beyond Larry’s statement about JAVA.  I suspect that is not because you can’t get into coding some arcane part of your application but I hope coding is infrequent and at a level of abstraction sufficiently removed from the guts of the operation to make it possible to have one version of code for the whole planet.

The Fusion applications, specifically the CRM stuff, are compatible with Oracle’s Social CRM gadgets and widgets and I expect that it will offer fairly robust support for enterprise computing when the applications hit the street.

The UI looks nice.  I don’t know what the technology is that supports it but it has an Adobe Flex look.  Nice job on that – it will give all those Gen Y people coming into sales and other front office disciplines a feeling that they are using something as modern as the games they play on the home computer.

That’s about all I feel qualified to say.  We need to see more but for now it is very good to see Oracle redeeming a promise it made a few years ago when it went on a buying spree in the front office market.

Key Findings for OOW #2

Posted: October 15, 2009 in CRM
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This time a little more serious.  Ok?

I am a software and CRM guy so that’s the focus of this piece.  Much of Oracle Open World (OOW) was table setting.  It was all interesting and valuable but it was also a lot of independent data points.  There was lots of cool CRM introduced for sure but it all lacked a certain coherence until the Fusion announcements.  That’s not a bad thing by the way, just a reflection of the maturity level of so many products.  Some interesting stuff:

Support for retailers and anyone who wants to support employees who are directly involved with customers.  For example, handheld applications that bring customer information to devices in support of sales clerks.  Not just the customer’s size and account numbers but things like intelligent offers and any loyalty points accumulated so that a pricing negotiation can happen on the spot.  The same technology supports users on their mobile devices to do things like buy train tickets and other self-service purchases.  This was not really new for Oracle but it has been improved and it looks better with each iteration.

I have several problems with the self-service example though.  The demo was from the Swedish Rail Service and it showed how customers can buy travel packages and trade in frequency travel points —  you get the idea.  But there’s no infrastructure for this in the U.S. of A.  For this application to work we need a high-speed rail infrastructure and that will take about ten years (LOL).  Good thing Oracle is looking at foreign markets.

I attended the afternoon half of a Chief Sales Officer Executive Summit or some such thing on Wednesday afternoon.  It was very good.  Lots of high-octane sales executives from billion-dollar (or equivalent) companies talking about their success with Oracle-Siebel and Oracle CRM On-Demand and their successes.  They had an economist give a quick analysis of the world economy and for a practitioner of the dismal science, he sounded upbeat.  I regard this as a contra indicator of something, just not sure what.

No surprises there in the following sense.  CRM and SFA are pretty mature, the biggest gains we are likely to see going forward will likely be in more enlightened use of the products by the high-octane talent.  I am not optimistic in the short term for the following reasons.

Anthony Lye did a good job presenting the state of the union in SFA mediated selling today.  Most people still use spreadsheets to make forecasts — letting error and unpredictability enter every time a sales manager decides to spiff up the data or apply a fudge factor.  Lye’s slides showed only a tiny fraction of users had forecasts that were worth anything (i.e. accuracy rating of 90% or better) yet we keep messing with the data.

I have an idea.  Rather than futzing with the data in spreadsheets, let the forecasts stand as they are and make accuracy a criterion for sales compensation.  Then stand back and watch things improve.  Short-term pain for long-term gain.

Ok, Oracle showed plenty of good technology (including Fusion apps as part of some demos) like that described above, for B2C segments and even more for B2B but the thing you come away with is that Oracle is really focused on the enterprise.  Oracle has a lot for the mid-market user – it’s more about what you don’t buy in that case – but they really groove on the sophisticated and complex selling that goes on in billion dollar companies.  They have apps that solve problems that mid-market companies might not even encounter.

For example, the Oracle deal management application takes a lot of data about what a customer has bought already, their price tolerance, the value of a deal, what other companies might be paying for similar deals and derives a statistically relevant price for the deal.  This happens automagically after the sales representative has fed a few data items into the system.  Management, meanwhile, had set a few parameters in the system and out pops a price that the boss will, if not love, then certainly tolerate.

Smaller companies don’t do this kind of thing much.  They’re focused on closing as much business as they can at the end of the quarter.  Too bad, because Lye’s slide deck included one chart that showed the 30% of companies knew they were leaving money on the table – but they were not sure how much they were leaving.  Maybe there is broad applicability for deal management.  Ya think?

My impression of the related sales applications is that they were best for companies that sell to managed accounts.  You know what I mean, two companies have long term relationships and sell parts, components, raw food and the like to a large group of repeat customers.  That’s not the only kind of business they do but it’s significant and the Oracle apps work well in that large environment.

Oracle also has some apps that I find more interesting for things like territory planning and while they got some attention in the executive summit I could have used to see more.  My favorite is something that helps find the “white space” in a territory.  I wasn’t familiar with the term white space until this week but now I can use it almost as much as the Governator says technology.

What white space refers to is the knowledge that a territory acts like a buffer.  It can absorb only so much before it gets saturated (think of a kitchen sponge here).  Once the buffer is saturated it won’t absorb more so it’s smart to know at the start of a year how full your territory is – especially if you plan to assign quotas that your people have a realistic shot at making.  Ok, the white space application helps the manager figure this out by taking account of things like the target density in the territory, what’s already been sold, the average sales cycle, price points and other relevant information.  That’s cool and my only critique of this and other cool stuff is that Oracle didn’t show it off enough for my taste.

These are some of the applications that separate Oracle from other SFA vendors and they represent some true differentiation.  I hope they do more with these apps.

I was going to write about Fusion now but this post is getting long so the next post will be about Fusion.


Open World most resembles Forrest Gump’s box of chocolates in that there is such variety that you never know what to expect.  At any moment there is equal probability that you will be dazzled, challenged, delighted and perplexed.

This being journalism, perplexity reins as a dominant topic and perhaps the most perplexing thing about the meeting is the show floor which includes large booths from the heavyweights in the industry a.k.a. Oracle’s greatest competition and greatest customers, for example, SAP and Microsoft.  Salesforce.com’s booth sits long and narrow moored on the show floor like an aircraft carrier in a crowded harbor.

By the time most of you read this Marc Benioff will have spoken and we will at last have an answer to the question haunting the halls of the Moscone Center.  Why would Benioff speak at Open World, the user meeting of one of his staunchest competitors?

You can make all of the arguments you want about how Salesforce relies on the Oracle database to serve its millions of customers, you can invoke arcane game theory to explain this apparent cooperation among competitors if you like – after all the Nobel Prize in Economics was just awarded to two social scientists who studied this phenomenon.  Still you are left with an irreducible Why?

Benioff speaks at one today and may have an answer.

In CRM kudos have go to Anthony Lye and his team for their top to tail work with the Siebel and CRM On-Demand suites and the dogged determination to prove the necessity – even desirability – of hybrid premise-based and on-demand approaches to CRM.  I will not digress into a discussion of my oft repeated belief that this is a transition state on the way to full Cloud Computing in deference to my hosts and I only wish they would give up the sophomoric assertion that cloud computing is simply vapor.

The CRM team is bristling with innovations for large and small customers –announcing twelve new products, eighty customer driven enhancements, thirty-one new features, a REST API, CRM availability in Microsoft Outlook, and a new Siebel version coming this year.  I think there’s more but maybe my note taking is not so good.

Larry Ellison spoke on Sunday night — a cameo in Scott McNealy’s keynote.  Ellison made the expected and highly believable statements that rather than letting Sun sink into the, uhh sunset, once the merger is completed, Oracle would increase its investments in Sun systems beyond the hefty investments that Sun had been making.

Oracle’s stewardship of PeopleSoft, J.D. Edwards, Siebel and fifty-five other acquisitions (according to Safra Catz) provide the needed street cred here.  Ellison even had fun poking IBM about an internal program they call Sunset reminding all that one man’s sunset was another’s sunrise.  He then proceeded to announce significant benchmark superiority over Big Blue.  Some things don’t change, benchmark competition is one of them.

But Sunday was McNealy’s time to shine.  The justifiably proud Sun CEO rattled off a slew of Sun’s leading innovations in CPUs, memory and file management, operating systems, and, of course, JAVA.  Many of us forget how many devices run on JAVA code — without any “JAVA inside” branding — but it’s a lot and McNealy was happy to provide a glimpse.

Ellison will speak on Wednesday to conclude the meeting and my contacts keep telling me that my questions such as those about integrating the sprawling software suite will gain clarity then.  We’ll see.

Perhaps the most interesting moment of the show for me so far came on Sunday at the end of McNealy’s speech.  He showed a slide meant to sum up his experience at Sun as well as the operating philosophy the company has been run by.  The slide said we (Sun),

  • Kicked butt
  • Had fun
  • Didn’t cheat
  • Loved our customers and
  • Made money

(I am not a hundred percent on the last bullet, note taking again.)

McNealy concluded by saying of the merger of Sun and Oracle, “Larry’s going to like his new toy.”  The statement immediately put me in mind of Newton’s famous summation of his own career when he said near the end of his life:

“I do not know what I may appear to the world, but to myself I seem to have been only like a boy playing on the sea-shore, and diverting myself in now and then finding a smoother pebble or a prettier shell than ordinary, whilst the great ocean of truth lay all undiscovered before me.

I can’t think of a better description of why these very bright people work so hard to make electrons dance.  Sure, it’s profitable but at the end of the day it’s even better if the ride has been fun.

Following fastly

Posted: February 25, 2009 in CRM
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Oracle continued its fast-following ways last week when it introduced additional functionality for Oracle On-Demand Release 16.  The statement completed a two part announcement begun the week before and brings to eight the number of new on-demand CRM applications from the company.

The products announced last week include Oracle Self-Service E-Billing On Demand, Oracle Sales Library, Oracle CRM On Demand Deal Management, Oracle CRM On Demand Enterprise Disaster Recovery and Oracle AIA integration from Oracle CRM On Demand to JD Edwards Enterprise One.  All of these introductions are quite useful and together they say a lot about the company’s direction and approach to the market.

Oracle is aiming at the enterprise on-demand space.  If you ask Anthony Lye, senior vice president and all around CRM maven why he’s targeting that space you will get the same answer a reporter once got by asking a famous bank robber why he robbed banks.  That’s where the money is.

Oracle is one of a small list of companies that can readily command the enterprise market’s attention.  Many of these applications make sense in any setting but they are especially suited to the enterprise.  The best example I see is Deal Management.  I have seen the demo and just the thought behind the application is impressive. 

We all know that many big deals are deals in the true sense—list prices are often not accurately reflected in the final price.  For example, at some point in a big deal the difference of a few units either way will not affect the vendor’s revenue structure as much as not getting the deal.  In other words, there is a balancing point between price and perceived value and a vendor has to be smart enough to spot the balance without giving away the store.

It sounds easier than it is especially in an enterprise situation where vendor and customer may have a long history.  The customer’s price tolerance, budget, current installed product base, recent purchases and a lot more go into pricing the deal.  Knowing when to lower a price and when to hold firm are important to the seller and historically, the decision has been more art than science.  Deal Management provides a workspace, graphics and some fancy math in the background to help vendors sort it all out.

If all the additions to the on-demand CRM suite were as unique and clever I would have less to write about.  The disaster recovery and integration products introduced last week get a pass both because they are good and because they are the kinds of products that a vendor like Oracle ought to be involved in providing to customers.  Other products, like the Sales Library, are a different story.

Oracle has a storied reputation for building products more than partnering.  To be sure, the company has a partner program with many participants.  But while it touts fourteen Inner Circle partners (most are also in Salesforce.com’s AppExchange), Salesforce.com publicizes a partner community that is pushing one thousand. 

Oracle’s total partner network includes 19,000 companies but that begs the definition since it includes ISVs, system integrators and resellers.  I suspect that the number of vendors that can add value to Oracle CRM On-Demand is larger than fourteen but probably less than 19,000.

Oracle’s next step in its effort to be the fast following on-demand CRM alternative ought to be opening up a bit more to the independent partner community.  What they’ll discover is that the independents are far ahead in thinking up clever new applications.  Some meld together baseline CRM with social networking sites and others have identified whole new business processes.  They might also find that independents who specialize may offer something better than the Oracle branded function.

I think the future of our business is with the small companies innovating around big new ideas.  Keeping those companies in a vendor’s orbit will require significant platform capabilities. So far Salesfsorce.com seems to have that market to its self.  To be more correct many companies that are non-traditional software vendors dominate the platform market.  In addition to Salesforce.com platform those vendors include Google, Amazon and Facebook.  If Oracle wants to be a fast follower it will have to tell a better story about platforms.