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Oracle Fusion Applications goes live, but are customers ready for it?

After six years in development, Oracle Fusion Applications is actually running live in customers’ production environments. But is it ready for prime time?

ORLANDO, Fla. -- Oracle Fusion Applications is here, and companies are actually using it live in production. Kind of.

After more than half a decade in development, Oracle customers have started implementing Fusion Applications in their IT infrastructures. Most are doing so in a piecemeal way -- a module here, a module there. But for the most part, the wait is over. Fusion Applications have arrived.

More than 50 companies are part of the Oracle Fusion Applications early adopter program, and more were encouraged to sign up during the Collaborate user group conference in Orlando this week. The Oracle keynote speech, by Senior Vice President Steve Miranda, was on Fusion. There were dozens of sessions on Fusion Applications. Clearly, Oracle is ready to have its customers go online with Fusion. Whether customers are ready is a different story.

“I think the technology looks good, really good,” said Alexis Pietraroia, senior vice president at a Fortune 500 insurance firm with more than $10 billion in annual revenue. “I just don’t like when they market it as being all mashed together. I really don’t want to hear about how good the (user interface) is.”

Oracle isn’t really pushing the whole-hog approach, though that is an option. Oracle and others basically break down the Fusion Applications customer adoption process into three types:

1)      Those who are satisfied with their investment in existing Oracle applications such as E-Business Suite and PeopleSoft, and who have no near-term interest in moving to Fusion Applications.

2)      Those who adopt certain modules of Fusion Applications -- such as human capital management, for example -- that live alongside their existing Oracle applications. This is a method that Oracle is now calling “co-existence.” Miranda said this has been and will be the most popular adoption approach.

3)      Those opting for full-blown Fusion Applications adoption. In an interview, Miranda said this approach would most likely be undertaken by customers who were new to Oracle applications.

Each adoption approach provides benefits but also leaves Oracle customers with concerns. The first may leave customers wondering how long Oracle will develop and support applications like E-Business Suite, PeopleSoft and J.D. Edwards as they exist today. Miranda said customers need not worry.

“All we’ve done is add Fusion Applications as one component,” Miranda said, adding that there is now a “roadmap for each going forward.” He did say that Oracle will work on producing a lengthier roadmap for each product “so you have a better idea of Oracle’s investment in all the applications further down the road.”

Concerns about how long those roadmaps will last for existing applications are valid. A Gartner report in November on Oracle-Siebel CRM said that innovation “will likely be focused on Oracle Fusion Applications, rather than Siebel.”

“The decision time on whether to migrate to Oracle Fusion Applications for CRM is not infinite, but it is elongated until after 2013,” the report reads. “We estimate that the last major release of Oracle Siebel CRM could be as late as 2013, and would have full support for five years, with Oracle Sustaining Support provided after that.”

The next approach is piecemeal. End users can adopt certain modules of Oracle Fusion Applications as they fit their business needs, and then evaluate whether they want to adopt more down the road. This is the “co-existence” method. Fusion Applications were built in such a way that they can integrate with existing Oracle applications.

How well that integration works is still a question, though financial services firm Principal Financial Group -- one of the first customers that has gone live with Fusion Apps -- has taken the piecemeal approach thus far and has been happy with it. The company is running PeopleSoft for financials and human capital management integrated with Fusion Workforce Compensation.

But there are concerns that allowing customers to take the piecemeal approach slowly sucks them into adopting an all-Oracle infrastructure. Fusion Applications require Oracle Business Intelligence Enterprise Edition and Fusion Middleware. So the concern is that a customer starts implementing pieces of Fusion Applications, and before they know it, they’re completely red-stacked.

“Doing all these acquisitions and taking all their code into a new platform, that’s never been done before,” said Sebastian Grady, president of third-party Oracle support company Rimini Street Inc. “I’m not saying it won’t work out; it probably will. But there will be fits and starts.”

Floyd Teter, an Oracle ACE director and consultant at Innowave Technology Inc., has essentially been working on and testing Fusion Applications since it was first in development back in the mid-2000s. He said that the performance of Fusion Applications is impressive, but it costs a lot in terms of a company’s physical and software infrastructures.

“You have to think about resources in terms of the drain it’s going to put on your systems,” he said. “That increased performance with Fusion Applications can be a challenge if you don’t have the underlying middleware and hardware tweaked to deal with it.”

Teter predicted that new customer adoptions of Fusion Applications will primarily be done in remote data centers, hosted by Oracle or another vendor. Principal Financial Group, for example, is hosting their Fusion Applications deployment in an Oracle data center.

“It might be cheaper for many to write a check to a hoster instead of investing in upgrading the skills of its people,” he said.

Most important, Teter said, companies must do a detailed cost-benefit analysis to determine if Fusion Applications is the right fit, or if they should just continue on the existing applications roadmaps for however long they might last.

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