A significant drop in sales of its E-Business Suite isn't doing much to help position Oracle Corp., as it battles the likes of SAP, PeopleSoft and others over the enterprise resource planning (ERP) space.
Although Oracle Corp. president Charles E. Phillips Jr. said last month at a New York City user group meeting the decline is due to his company's bid to acquire PeopleSoft, some Oracle users said there is another reason for the drop.
The product isn't very good.
"It's simply over-engineered, overly complex and way too expensive to support," said Roger Carter, who heads a Warsaw, Ind.-based consultancy DBConnect Solutions Inc.
Carter, who has been an Oracle DBA for nearly 20 years, said his company made a lot of money by patching and repairing the Oracle 11i Suite when it was first released.
Paul Driscoll, a senior systems engineer at Cambridge, Mass.-based Millennium Pharmaceuticals, said that while his company is pleased with the performance of Oracle's application suite, he admits he doesn't immediately purchase Oracle's E-Business Suite releases to make sure the applications remain stable.
Millennium is using version 11.5.8 and plans to move to version 11.5.9 in the near future, Driscoll said. Oracle plans to roll out version 11.5.10 in November.
"There is truth in the fact that Oracle's application suite has never been up-to-par with their phenomenal database products," Driscoll said. "I also believe that there are some versions of the applications that are more stable than others."
It's why they continue to lag behind competitors in the ERP space, industry observers noted.
It's not as if Oracle doesn't realize it has a problem in this area. In fact, last month the company announced it would offer a scaled-down E-Business Suite Special Edition North America to lure Microsoft customers on limited budgets. Developing software packages that are less complex for companies on limited budgets is part of Oracle's strategy, Phillips said.
A major reason for the complexity is that Oracle's application suite is designed to work in a wide swath of industries. An aerospace firm, for example, may not need the same tools that a hardware manufacturer needs, but end users at both firms will see unneeded functions, making Oracle's suite appear overly cluttered and far too complex, said Robert Lepanto, a consultant who serves as president of the New York City Oracle Applications User Group.
"Oracle has done a poor job in trying to address the complexity issue," he said. "The biggest opportunity left for Oracle is in the middle and lower tiers and it's got to compete against a different array of players there, so hiding or reducing the complexity of the suite is key to customer wins."
Lepanto said that if Oracle's bid to takeover PeopleSoft is successful, it will likely try to integrate many of the technologies within PeopleSoft's products to improve the human resources components to the E-Business Suite.
To address complexity, Oracle also needs to determine how to hide layers of its product so a small or mid-sized company doesn't feel overwhelmed by it, Lepanto said.
"One of our key messages is that we've been simplifying our applications," said Fred J. Studer, vice president of ERP marketing at Oracle. "Over the last three years, we've been making an effort to simplify the delivery model and customize what they need without having to change the code."
Extending its reach to small and mid-sized businesses is the only segment in the saturated ERP market where Oracle can pick up new customers -- without acquiring ERP vendors like PeopleSoft, Studer said.
The preconfigured business applications are scaled down for smaller companies that don't need all the features in the main E-Business Suite. The special edition is priced at $149 per user, or $49.95 per CPU, for a maximum of two processors.
Meanwhile, Oracle has been trying to increase interest in its on-demand software hosting business, which allows companies to purchase software from Oracle without going through giant installation projects. Studer said it reduces complexity as does Oracle's Business Flow Accelerator packages, which reduce the time and costs associated with application implementations, Studer said.
"We actually wrap our accelerators in a services element and lay out a framework so if a company chooses to extend the suite they have the foundation to do so," Studer said. "We're continuing to automate to help customers adopt applications very quickly and give them the ability to incrementally solve a pain point to get more efficiencies out of a system."
Other customers said the complexity issue can be solved not just by Oracle, but also by consultants hired to help integrate Oracle applications. Choosing the right firm to implement an Oracle installation or upgrade can help eliminate performance issues synonymous with complexity, said Carl Rubin, a consultant with Oracle consultancy, Monument Data Solutions, Middleton, Mass.
"Oracle is complex, but the market wants completely integrated systems and they are not simple," Rubin said. "It is up to the implementers to streamline the system and make it simpler to operate."