Oracle Cools on Fusion, Focuses on Current ERP

Published: February 6, 2007

by Alex Woodie

Oracle unveiled major new releases of four out of its five application lines last week, including new releases of the J.D. Edwards World that is popular among users of the IBM iSeries platform. The software giant also backed off a bit on Fusion, its next-generation unified ERP platform, as it emphasized how responsive and flexible it's being to its customers' near-term needs.

It might be a stretch to call it a "kinder, gentler" Oracle, but there was an unmistakable shift in the software giant's rhetoric last week as it unveiled J.D. Edwards World A9.1, Oracle E-Business Suite Release 12, PeopleSoft Enterprise Release 9.0, and Siebel Release 8.0--and talked about customer adoption of J.D. Edwards EnterpriseOne 8.12, which it launched last year.

The difference was, instead of talking about how great the next-generation Fusion ERP products will be and how it will benefit customers who take the gamble (and ERP migrations are always gambles), Oracle talked about how important the feedback from its customers was in shaping the new releases, and how much customers will benefit from the upgrades now. Collectively, Oracle refers to the new focus on existing products as its "Applications Unlimited" initiative.

During a 90-minute Webcast last week, John Wookey, Oracle's applications chief, acknowledged that Fusion ERP was making customers nervous. "We're not going to drive a bunch of customers to technology they're not ready for, but rather take the technology we're using to develop Fusion applications, and . . . bring that back to products they're actually running today."

It may be a slight change, but it's refreshing, nonetheless, to hear Oracle sounding more like a customer-driven application developer than the uncompassionate decider of thousands of companies' technology futures, which is how it came across to many J.D. Edwards shops last year. Oracle finally got the message that they were unsure about Fusion ERP, and so it changed its rhetoric. Whether that rhetoric about giving customers more choices trickles down deeply into policy--say, by supporting the iSeries and DB2/400 as a database layer within Fusion ERP, which the company is still mum on--will be determined in the future.

That doesn't mean Fusion is dead. The Fusion middleware layer is still very much alive, even while Oracle tapers off on its Fusion application rhetoric just a bit for now. Oracle, like all of the other big ERP software companies that have gobbled up smaller ERP companies, has established a middleware layer to ease the integration process and open up existing applications, such as World, to other applications, such as business intelligence. Oracle eventually wants to deliver just one flavor of middleware across all ERP stacks rather than have several platform-specific versions. This is largely a good thing, as it increases the breadth and depth of capabilities available to legacy ERP products, while lowering the delivery costs.

World A9.1

According to Oracle, World A9.1 is the first major upgrade of the product since 1997 or 1998. The upgrade has been dubbed the "Renaissance" release, ostensibly because it will provide the aging RPG-based ERP new life.

"A9.1 is really a renaissance release for our customers," said John Schiff, vice president and manager of J.D. Edwards World at Oracle, in a podcast posted on the Oracle Web site. "It's bringing the product alive again, enabling customers to move forward and reduce cost, [giving customers the] flexibility to integrate into the modern world of e-mail . . . and importing and exporting of data."

Compliance and security will be the hallmarks of World A9.1. To deliver better compliance with regulations like Sarbanes-Oxley and the FDA's 21 CFR Part 11, Oracle is delivering a new approvals workflow engine, new segregation of duties capabilities, and better security to the address book component.

In terms of functional enhancement, World A9.1 will feature better integration, such as giving users the capability to attach document links directly to transactions (supported on OS/400 V5R3 and higher). Other improvements include more flexibility in the service and warranty management, better lot control management, more insight quality management, more "pull" processes in the Kanban module, better support for spousal life insurance in payroll, and support for electronic "positive pay" transactions in payroll.

On a technological basis, Oracle has made service oriented architecture (SOA) enhancements in World A9.1, including better exposure of World application and data logic to external systems such as Web services, and the latest regulatory updates.

Wookey also sounded upbeat about the possibilities of World. "We got a lot of feedback from customers saying 'This is a great product, it's just a little behind. It doesn't have support for the kind of compliance requirements I have today. I need an way to extend the application. I need ability to integrate this in a more straight forward way than it is today There's a set of things that would make this a great application, and really work great for my business.'"

Months Away

World A9.1 is still in the testing phase and not generally available. Oracle spokespeople would only give a vague commitment to deliver the release during the calendar year, which probably means a November or December launch.

In the podcast, Schiff said World A9.1 would not be the last release of World. But he also planted the seed for the eventual migration of World customers off the product.

"We'll be adding more features," he said. "In addition to that we're also looking at what Oracle is doing from a more long-term perspective in its overall application strategy, and making sure we'll provide paths for ours customers to upgrade, when its appropriate and if it's appropriate, for them to move from one product to another, to EnterpriseOne and the Fusion product as it comes to market."

"We'll be adding more features," he said. "In addition to that we're also looking at what Oracle is doing from a more long-term perspective in its overall application strategy, and making sure we'll provide paths for ours customers to upgrade, when its appropriate and if it's appropriate, for them to move from one product to another, to EnterpriseOne and the Fusion product as it comes to market."

"There will be no forced migrations," Wookey said in the press release accompanying the announcement. "These next-generation enhancements [in World] will leverage the same standards and technologies that are planned for Oracle Fusion Applications, preserving customer investments."

On a positive note, Oracle is continuing to work with IBM's System i organization, to test World and work on other things. "Oracle thoroughly tested World A9.1 with the IBM i5/OS operating system and we believe our mutual customers will benefit from the feature-rich product set and can upgrade to A9.1 and our latest operating system, i5/OS V5R4, with minimum disruption," says Mark Shearer, general manager of IBM's System i business.

Oracle also made a splash last week around EnterpriseOne--the only other Oracle product to run on the i5/OS server. Despite Oracle's insistence that it achieved something incomparable in the industry by simultaneously launching major upgrades of five product lines, it was really just four, since EnterpriseOne 8.12 shipped 10 months ago. (And in fact, when you consider that World A9.1 is months away from availability, it's really only three.)

According to Oracle's announcement, EnterpriseOne shops that have made the move to version 8.12 include Amarr, Centre Vinicole Champagne Nicolas Feuillatte, Developers Diversified Realty Corporation, HarperCollins Publishers, Land O'Lakes, Pernod Ricard, Saneco Group, SKOPE Industries Ltd., Sound Transit, and Valley Crest.

Cold Fusion

While last week's focus was on the "Applications Unlimited" release--which refers to the five ERP and CRM suites Oracle sells now as opposed to the Fusion ERP software it will sell in the future--Wookey couldn't help from going back to the future near the end of his presentation.

Then Wookey went on to say why it's still the goal to move customers to Fusion. "Why are we developing Fusion?" To improve customer's businesses. "It's the same mission we've always had. At some point in the future, the next generations of applications are going to become important to them."

"There is a change coming in this marketplace. Every five to 10 years, there are changes in application architecture," he says. "There is a change coming in SOA and standards-based middleware."

This goes to the heart of what Oracle is doing with Fusion. Currently, Fusion middleware exists externally to the five core applications. But when Fusion ERP finally ships, the middleware layer won't be external to the applications anymore. "It's middleware inside the applications as we design them," Wookey says. And that inevitably will become a major advantage as SOA and Web services gain more traction in enterprise IT.

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