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Users caution to look before you leap with Oracle Fusion Applications

Users generally like what they see of Oracle's Fusion Applications but have questions about added maintenance and training costs, as well as protecting customized solutions.

Users and analysts are generally giving favorable reviews to Oracle's Fusion Applications line, which had its coming-out party at Oracle OpenWorld earlier this month. But they warn that there are several issues they need to think through before making a strategic commitment.

The upcoming applications suite is not without its potential cost savings and productivity benefits, but some observers caution that there could be added maintenance costs associated with mixing software as a service (SaaS)-based Fusion apps in with non-SaaS applications, some difficulty in carrying existing customizations forward smoothly, and new SaaS training costs for IT personnel.

Read more about the unveiling of Oracle's Fusion apps at OpenWorld
Learn more about Fusion Applications

 Additional maintenance costs for Fusion apps come into play, particularly for those users that have a single server instance. If, for example, an IT shop is running the non-SaaS financial package from Oracle's E-Business Suite on one server but wants to use Fusion's SaaS-enabled human capital management software, the integration of the two applications must be done through Oracle's Web-based Application Integration Architecture (AIA). This would require a second server instance, creating overlapping data and thus incurring added maintenance costs, noted Floyd Teter, system engineer for institutional business systems at NASA's Jet Propulsion Laboratory and chairman of the Fusion Applications Council within the Oracle Applications Users Group.

"The question is, does the value of moving forward incrementally with Fusion apps outweigh the cost for some businesses in terms of maintenance. For some businesses, the answer is yes, and for some, no," Teter said. One analyst agrees in part with Teter, saying that most users swapping out a non-SaaS application for a Fusion application, or mixing and matching them, will face an iterative process involving a lot of research and planning.

"If someone goes to Fusion financials, then how do they keep all of their other stuff and how will they know when to cut over [to the Fusion applications]? For the next six to eight months, people will want more specific steps about how to prepare, or even if it is a viable option," said Ray Wang, a partner with the Altimeter Group in San Mateo, Calif.

Many larger IT shops have worked "long and hard" to achieve a single global instance, Teter said. But he added that if they gravitate incrementally to Fusion, they would have to break that single instance up into multiple pillars and then maintain those pillars separately.

And if there is one thing that Oracle shops don't need to hear about, it is additional maintenance fees on top of the standard 22% tab they now pay against their software license contracts, as well as the 10% uplift fee that is part of the vendor's Extended Support plan. Oracle, however, did announce in May a waiver of first-year Extended Support fees for its products through 2011.

"I know some users now who are making choices between keeping workers and [continuing with] their Oracle support costs. Or they are looking at [Oracle] middleware components and asking themselves what else they can use that won't hit them with such a heavy maintenance fee," Teter said.

Another factor that could slow Fusion adoption is the cost of training for Oracle IT pros not versed in SaaS-enabled technologies. While Oracle has SaaS products in the market, such as CRM On Demand, the Fusion applications figure to directly touch a broader number of end users, which is likely to mean increasing the number of tech support employees at companies.

Look back to our coverage of Fusion apps from OpenWorld '08
Learn more about Fusion Applications

 "We have what I would call a core group of people here who have worked on server-based projects and are pretty up to speed with SaaS and cloud stuff. But if I were to deploy a number of these [Fusion] applications out where lots of users are interacting with them, I'd have to train a lot more of my people on it," said Dan St. John, a systems manager with Verizon Communications.

"You would be surprised at the lack of depth in knowledge among technical personnel in Oracle shops with SaaS. IT guys need to have a handle on the model, and the vast majority don't," Teter added. "If I [were] a CIO or IT ops guy, I would start looking at this now."

A third issue to be considered is how IT shops can salvage financial investments made in customizing applications by carrying them forward to work with Fusion. Most users say they first need to know just how difficult that process will prove to be.

"We have built some apps internally that work with Oracle [server] apps, along with some third-party customizations we outsourced. No way can we go to something like Fusion without assurances that these customizations are protected," St. John said.

"If you have a stable of developers that have built customizations for you in PL/SQL," Teter said, "that pony will not run very far in the Fusions Apps world. You have a skill-set issue to deal with."

On the sunny side, some analysts and users believe the SaaS-enabled Fusion suite will not require additional investments in infrastructure -- a big incentive for IT shops with budgets that figure to be about as tight next year as they have been over the past year or two.

"It is nice to have a SaaS option from Oracle, because big chunks of my budget go to IT operations," said Dale Simpson, a systems administrator with a transportation company in Houston that he wanted not to be named. "It gives me another option to save money, but we are going to have to look out for some of the integration aspects. They could be tricky."

Analysts believe the work Oracle has done with the browser-like user interface for the Fusion apps will prove to be a winner with IT pros, because it figures to reduce user training, and end users, because it should boost their productivity.

"I haven't had any hands-on [with the Fusion apps] yet, but they sure look like they could be Word or Excel apps," Simpson said. "If I can just give, say, my accounting people something that looks like Windows, and they can just go to work with it, I would be pretty happy."

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