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Mark Smith on Oracle Fusion Application strategy

Oracle showed off its long awaited Fusion Applications at OpenWorld this year, its suite of applications that blend together the best functionality of its acquisitions of Siebel, PeopleSoft, JD Edwards and others. While Fusion Applications won't be generally available until 2011, customers need to start making plans for how and if they want to move to the new suite. In this video, Mark Smith, CEO of Ventana Research, offers some advice on the highlights of Fusion Apps, the upgrade path and how business needs to remain engaged in the process.

Read the full transcript from this video below:

Mark Smith on Oracle Fusion Application strategy

Barney Beal: All right, Mark. We got a look at Fusion Applications, at
least preliminarily. Give us a sense of what you thought they
did well and what you found might still be missing?

Mark Smith: I think what is important to realize about Fusion
Applications is that we are really going into a next generation
applications, which is all about usability, so there is a lot of great
things around Fusion from a simplicity perspective, and also that
are very information-centric. We got an opportunity to get insights
about what is going on, compared to just worrying about how we
are putting data into our business.

Barney Beal: What is your advice to users out there, people on
PeopleSoft or Siebel? What should they be thinking about as they
start rolling out Fusion Applications?

Mark Smith: When looking at Fusion Applications, we really need to
be thinking about what business really needs in what timeframe. A
lot of our legacy applications like PeopleSoft and Siebel, they have
done a good job over the last 5 to 8 years. Now we really need to
look at what is really needed by businesses and how does IT really
facilitate that? It may or may not look at a quick migration to
Fusion. We might need to actually wait, make sure we get a
couple of hundred customers using these applications first to
really understand- Will the impact and the value of them come to
a reality in a short period of time or a long period of time?

Barney Beal: Do you think there is a clear upright path to customers
out there? Is there is going to be some debate over do we wait,
how long do we wait, how does maintenance play into that?

Mark Smith: The practical reality around Oracle's Fusion is that we
need to look at this as a net new purchase of applications. A
migration, a transition is not going to be easy, so no matter if you
are starting that path quarter or waiting until 2011, 2012, it is
going to take some work. There is no ifs and buts about it; it
is going to require some consulting, some migration, and some
assistance, so you should not look at this as a given that just
upgrading to Fusion is going to be a simple path.

Barney Beal: It seems like the initial Fusion apps are pretty
horizontal. What about the people that have done a lot of
customization for their own industry?

Mark Smith: A lot of industry applications were custom-built over the
years and only had a handful of customers. Those organizations are
really going to need to rethink their applications. They are going to
really think about, horizontally, what is Oracle doing in CRM? I
was actually surprised that Oracle is unveiling the Sales
Performance Management CRM, which is a real focus on management
and analytics for sales. That is a complete different approach
than Siebel's CRM approach, for example, which was more
SalesForce Automation, SFA centric. It is not some kind of
simple transition; this is a pretty reevaluation step.

Barney Beal: Do you think people would consider moving to another
application stack entirely?

Mark Smith: We have to be honest. Over the last 3 to 5 years, a lot of
organizations, especially in the business side have brought on
new applications; could be a point application. Many times cloud
computing offers service, where the business said, 'I am just
going to rent this thing. I need to fill it in here because I am
not going to get what I need out of my current Oracle
application, E-Business Suite, for example. There is a mixed
portfolio of applications today, that is the practical reality,
and that will require also the IT re-syncs up with what
businesses are actually using for certain tasks, and think about
how those can be blended back together, potentially with Fusion.

Barney Beal: Oracle is obviously got its eye on the Cloud and software-
is-a-service where the Fusion releases. How does that play into
those decisions, whether it might be replace existing SaaS app?

Mark Smith: That is a really good point. Oracle is making the steps into cloud
computing. No matter the jokes and the puns from Larry Ellison,
the reality is that Oracle realizes that business actually has a
budget to spend, and they have been using that to rent
applications. When you look at a specific application you are
renting from another provider, it is not that you are going to
compare it to the whole Oracle Fusion Suite anymore. It is a
very, the head of sales, head of marketing, head of call center,
and head of supply chain needs to make the decision on the
applications they need for their business, and if they are in
the cloud, it is more of a conversation with IT about inter-
application integration, inter-data integration, which is a good
thing for IT to be focused on, frankly, and probably less so on
what does business need to be using hour-to-hour, day-to-day.

Barney Beal: Do you see any of us with a suite play? Are people
really going to be look at the Fusion modules, even though they
are talking about the Fusion applications?

Mark Smith: Yes. Fusion is really going to be adopted and brought
onboard one module at a time. That is what business wants, they do
not want to have a big, take on the whole suite and wait until we get a
number of applications up. They want to see incremental
progress, quarter-by-quarter. The buying habits have completely
changed from the traditional past of suite purchases.

Barney Beal: Do you have any sense of how migrating your existing
data and applications onto Fusion is going to go? What does that
entail ?

Mark Smith: It is a very good question. The data integration point of
going from an on-premise E-Business Suite, PeopleSoft, or Siebel,
and moving that data into the cloud is no easy task. Oracle has
taken some good steps with their middleware with data
integration, but the enterprise-to-Cloud data integration is a
new exercise for Oracle. They have not necessarily been at the
forefront in having thousands of customers doing that kind of
integration. Today we see vendors like Informatica, Pervesa,
JitterBit, and others that are actually out there and have been
actually doing this work. Oracle has to actually mature in both
customer adoption and best practices to really get into that
Cloud-to-enterprise integration.

Barney Beal: What is the bottom line takeaway for users out there
who are not at the show? What do you tell them?

Mark Smith: First off, looking at Fusion, and looking at specific applications,
it is a great opportunity. Frankly, there are some really neat
things that Oracle has done in their applications and
capabilities. Businesses are going to have to get re-engaged. One
of the things I found here at OracleWorld, not a lot of business
people here in the applications sessions; lots of IT people.
Business should actually give Oracle some slack and say that
they actually should look a little more closely, and not just
write them off as a big IT play. At the same time, they need to
keep IT to the table about how long it is going to take these
applications up and running, no matter if it is on-premise or in
the cloud.

Barney Beal: Great. Thank you, Mark.

Mark Smith: You bet.

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