Friday, November 19, 2010

Oracle Applications customers reveal their future plans

I'm a huge fan of primary research, especially when it is paired up with great analysis. Some Enterprise Software and Solutions (#EnSW on twitter) analysts base too much of their commentary and advice on what they read in the news, see at user conferences, and hear from other analysts.

Computer Economics is an #EnSW analysis firm with a difference. Frank Scavo and the folks at Computer Economics do great research - quantitative and qualitative - on the #EnSW world. If you are an IT executive, or an #EnSW vendor, you owe it to yourself and your enterprise to check out their research.

The latest published research from Computer Economics is a study called "Go-Forward Strategies for Oracle Application Customers." In the spirit of full disclosure, I should mention the following, and you should bear these facts in mind as you consider my comments:
  • I have been in the #EnSW world for around 25 years now, including long stints in executive product roles at Oracle and SAP.
  • My company, C3, may someday be competing with Oracle (and other #EnSW vendors).
  • Computer Economics provided me with a copy of this $995 report at no cost for my review.
Here are some key findings from the report, followed by some of my thoughts about the results:
  • Finding: Dissatisfaction with the cost and benefits of support runs high across the Oracle Applications customer base, with 42% of respondents reporting dissatisfaction with the quality of Oracle support, and 58% reporting dissatisfaction with the cost of Oracle support.
  • My thoughts: That is a very surprising result, showing an astonishingly high level of dissatisfaction!
  • Finding: Customers generally expect Oracle to grow as a share of their IT spending, despite their level of satisfaction.
  • My thoughts: There are a number of obvious reasons for this result, including vendor consolidation, customer expectations of growth in their business coming out of this continued weak economy, and the difficulty of moving from one application product set to another.
  • Finding: Third party maintenance and support is attractive to a substantial fraction of Oracle Applications customers.
  • My thoughts: A far smaller percentage of Oracle Applications customers are considering third party maintenance and support as compared to the fraction who are dissatisfied with support quality and price. It is not clear to me that any third party can really deliver bug fixes, patches, and legislative and regulatory updates. Nonetheless, #EnSW vendors are increasingly dependent on maintenance and support revenue, and thus they are increasingly vulnerable to customers using third parties, or going off maintenance and support entirely.
  • Finding: Despite - of perhaps because of - their dissatisfaction with the current applications support, Oracle Applications customers are not planning a rapid migration to Oracle Fusion Applications, with 5% planning to migrate away from Oracle, 24% researching or planning to migrate to Fusion, and the remainder with no plans to migrate to Fusion. e-Business Suite has the largest percentage of customers considering Fusion Applications, and JD Edwards has the largest percentage of customers considering moving away from Oracle.
  • My thoughts: Oracle is just beginning to roll out information about Fusion Applications, with the first big "reveal" coming at this year's Oracle Open World. Many Oracle Applications customers have only a limited understanding of the benefits and features, and limitations, of Fusion Applications. Over time, you can expect this result to change dramatically.
  • Finding: The report includes information about the staff required to run various Oracle Applications products, including e-Business Suite, JD Edwards, Peoplesoft, and Siebel. JD Edwards requires the smallest number of support staff, with e-Bueinss Suite and Peoplesoft at the other end of the spectrum to operate.
  • My thoughts: There is significant value in this section, and in the report recommendations, for Oracle Applications customers.
Computer Research has done the industry another mitzvah in sponsoring and executing this research and analysis project. Oracle Applications customers, and #EnSW vendors, would benefit from reading this insightful report.