Tomorrow, Jan. 31, Oracle will host a major shindig in New York intended to further define its product plans for the core products -- PeopleSoft, Oracle E-business Suite, JD Edwards, and Siebel -- that it is maintaining and upgrading as part of its Applications Unlimited program. It's easy to say that there won't be any bombshells dropped at the New York show, as Oracle has learned that dropping bombs on its customers is a pretty lousy business model. Instead, it's going to be a little bit boring in New York tomorrow, just what the customers actually want to hear. Boring, when your business depends on the stability and reliability of your ERP, CRM or HRMS system, is often the best thing a vendor can offer its customers.
What's interesting is how much Applications Unlimited has eclipsed Fusion as the go-to strategy in the Oracle playbook. So much so that the rumors are swirling about Fusion's future: Will it ever see the light of day? Has it already been canned? Is it true that coding hasn't even begun? The buzz -- or anti-buzz -- got loud enough that I checked in with Oracle about Fusion recently and got the following response:
Fusion is alive and well.
Fusion coding hasn't necessarily (!) started because the model-based development environment being used generates code only at the very end.
The main work right now is on the specifications, the workflows, and the processes.
Some prototype process flows will be show this summer.
So what are we to think of all this? So they're still on track for Fusion. The real question may be whether Fusion even matters any more.
It's clear from looking at Oracle's numbers that maintenance revenues are becoming a bigger and more important slice of the pie, and, if I were inside Oracle betting on cashing in my options, I'd be placing every resource I could on making sure those Big Four applications were up to date and their customers loving it.
It's also clear to me that no matter how solidly behind Fusion Oracle is today, or how groovy the prototypes look in six months, a solid Fusion-based revenue stream isn't very likely for a number of years. Mostly because it's going to be hard to justify going with Fusion 1.0: Even if Oracle does a bang-up job first time around, the 1.0 curse will keep a lot of customers on the fence waiting for the 1.0 pioneers to debug the software well-enough to make 2.0 the real GA release. That's just human nature -- fueled by a pragmatism borne from too many 1.0 release horror-stories, Oracle's and everyone else's.
But the 2009 timeframe does mean that customers sitting on the fence about where they are going to be in three years with Oracle are paying a lot for their uncertainty: at 22% of their license fee, the maintenance costs for most customers will have paid by 2009 will be darn close to their original license cost, if they haven't already topped the 100% mark by then. It's not necessarily a back-breaking way to put off a major decision, that 22% is stuck in most IT budgets the way entitlements grace our Federal budget. But any Applications Unlimited customer looking to truly cut costs and streamline the IT budget has to ask him or herself what price that uncertainty might be costing.
Nevertheless, Oracle is doing a lot better as the custodian of PeopleSoft, JD Edwards, and Siebel than many, myself included, thought they could. So much so that I personally think they could run the whole event without mentioning Fusion and no one would really care. Of course that would make it just a little less than boring. Which wouldn't necessarily be a bad idea.