On June 6 Larry Ellison and Mark Hurd announced details surrounding the Oracle Public Cloud offering, highlighting Oracle’s incorporation of the cloud as integral to the Fusion Applications strategy. The announcement was delivered in vintage Ellison, irritating some who don’t like his showmanship. Much of the content was focused on the technical aspects of the Oracle Public Cloud: is single tenancy better than multi-tenancy; the value of industry standards; and the virtues of virtualization. There were also announcements of various acquisitions which will support Oracle’s social media capabilities.
Enterprise Social Media is a very trendy area today; “Social Media” may even be too large and ambiguous a subject area to capture its diverse parts. Doug Henschen comments that Oracle is reacting late to Social Networking, which has some validity; however, Oracle’s social networking vision is an advance from what’s currently available from other vendors. Focusing on apps that support internal collaboration, today there are enterprise social networking tools that are tightly integrated with business applications & associated processes (Chatter), and ones that span the enterprise (Jive), but none that really plug into all of your primary enterprise applications (easily). Taking a quote that puts things succinctly from Mark Hurd’s recent InfoWeek article:
“Because businesses are run by: I’ve got a strategy. I then support that strategy with a business model. I then support that business model with processes. I then automate those processes with applications.”
For enterprise social networking to be effective it must enable communication and collaboration across processes, across applications; and have capabilities that support those interactions. Oracle Social Network promises a social networking platform that is tightly integrated with Fusion applications, and contains capabilities that are more than hash tags, posts, updates, likes, etc. (think of a Facebook/Google Wave mash-up fed by all your enterprise data). This will allow for easier incorporation into cross departmental/cross process collaboration. An enterprise social networking platform that is tightly integrated across processes and applications may encourage emergent business processes that break down organizational silos.
Oracle also highlighted their investments in customer facing social media applications, with the acquisition of Vitrue and Collective Intellect. These applications I will discuss in a subsequent post.
Multi Vs. Single Tenant
There’s been a lot of buzz about Oracle’s decision to leverage a virtualized single tenant model for their cloud, vs. a multi-tenant model. From what I know, Oracle architected Fusion Applications from the ground up to able to be delivered in a multi-tenant environment, but made a deliberate decision to deploy them single tenant. The benefits of multi-tenant are well known, including hardware economy, elasticity, effort to upgrade, and rapidity of feature releases. Multi-tenant limitations include potential concerns around security, API data allotment limitations, and some lack of control around upgrade cycles. In general the benefits outweigh the limitations. At the end of the day, customers purchase a cloud application because of the experience they get; including a rapid and relatively simple implementation (compared to on premise applications), reliability, usability, continuous innovation, and reduced cost of ongoing maintenance. The multi-tenant orthodoxy believes that their architecture is essential to delivering this customer experience. Oracle disagrees. In our limited experience so far as a customer of Fusion CRM since V1, Oracle is right. We’ve seen 2 major releases delivered on schedule, containing everything promised and more; and the offering is price competitive.
One major difference between Oracle and other cloud offerings lies in Oracle’s ownership of the entire stack. Oracle owns the data center, the hardware, the application servers, the middleware, the database, the application software; almost everything needed for a cloud application. This is unique amongst cloud app vendors, and may give Oracle an advantage. It may give Oracle the ability to deliver elasticity, easy upgrades, and continuous innovation; with robust security and control over upgrades, and without concerns around allotments—all on a single tenant architecture. Contrary to what many pundits are saying, I don’t believe Oracle made an about face to Single Tenant. Oracle clearly believes that their architecture is the optimal one. As Fusion Applications grow in adoption, time will tell who is right.
Oracle’s Cloud Strategy
Oracle’s cloud strategy strategy today includes offering a comprehensive suite of applications, a cloud database, cloud Java platform. The problem Oracle is setting out to solve is a reduction in the amount of disparate applications to manage, integration amongst applications, and the multitude of challenges such a scenario engenders. Salesforce.com and Workday are both great applications; but they exist in isolation, and it’s up to the owners of those applications to figure out how to make them work together. Intelenex deals with many customers with an Oracle ERP back-end who have struggled to figure out how to make their quoting, RMA, trade, and other processes integrate between Salesforce.com and Oracle EBS. There is tremendous business value in solving these problems for customers with a pre-integrated, best of breed application suite.
Nothing to this scale has ever been done before in enterprise software. Discussion of Oracle’s strategy is warranted and valuable for customers to make informed purchase decisions. For those that are distracted by Larry Ellison’s presentation style, there should be no confusion about his understanding of the cloud. Let’s not forget that he was an early and significant investor in both Salesforce.com and NetSuite. Oracle’s preliminary offering can be reviewed at cloud.oracle.com.