The migration occurs on a relatively regular basis, which is either a criticism that implies a lack of fixed direction or evidence of a supple ability to reinvent itself time and again. Considering that we're talking about Oracle, I'd say the latter is the right perspective.
If you can remember all the way back to 1998, you'll recall that Oracle was floundering in the applications space. It wasn't considered competitive, its relations with press and analysts were, shall we say, troublesome, and, worst of all, Larry Ellison was off sailing or surfing or otherwise having too much fun. In a bellwether piece of journalism, BusinessWeek reported that Ellison had decided to get Oracle back in the applications game. The strategy was simple, but there was really only one thing that had to happen: Larry got interested in applications again, and the turnaround was all but in the bag.
Here we are in 2003, and it's safe to say that there are some startling similarities. Oracle hasn't been pushing applications for the last year or so, preferring to focus on its apps server, database and collaboration suite messages. Larry has been off trying to win the America's Cup, and as a result, Applications sales have languished. (Ironically, considering that Oracle has had no upsell capability in a market where SAP and PeopleSoft are deriving 70-plus percent of their revenues from the installed base, the numbers Oracle has been turning in are actually rather good.)
Unlike 1998 however, the momentum for Oracle Applications has been building steadily. The troubled legacy of 11i bugs is ancient history, the fence-mending with the customer base has been highly successful, and individual areas like outsourcing and CRM are actually doing well for Oracle. There's a new head of sales who promises to fix the upsell problem and a renewed focus on marketing.
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Perhaps the best news of all for Oracle Applications is that Larry lost his America's Cup bid. The loss meant that Larry put in a personal appearance at the recent Oracle Applications World conference (as opposed to piping in his talk), which had its usual effect: the excitement level rose more than a few notches. It means, hopefully, that Larry will have even more time to devote to his laggard applications division as 2003 gets under way.
It's about time. Oracle has given up a lot of ground lately to its rivals, both in terms of customer wins as well as mindshare. With the exception of outsourcing and CRM, the rest of the applications message has been largely missing in action. There have been other bright spots as well, such as Oracle's pricing strategy overall, a competitive edge for which pricing VP Jacqueline Woods hasn't gotten nearly enough credit. But in general the applications world has shimmied along for the last year or so without much of an Oracle presence.
The effect of the Oracle migration back to applications will be significant, and not just for Oracle's competitors, who will undoubtedly find out, in case they ever forgot, that Oracle is a marketing force to be reckoned with. The customers will also benefit, and that includes the competitions' customers as well.
Oracle's comeback comes at a time when supporting heterogeneity -- a technological problem par excellance -- is becoming the No. 1 issue in the market. The issue is a natural for Oracle, with its unbeatable technological credentials, and I expect that Oracle will have a lot to add to the market as the need for linking applications from a wide vendor base becomes imperative to the support of next generation functionality. Add to that a mature product line, new sales leadership, and the chance that Larry is now paying attention, and the migration is on.
Hang on to your hats. Oracle has done this so many times that it's almost part of the business model. Larry's sea legs may not have taken him to the America's Cup, but they can take him back to the top of his market again. And, baring some other distraction, they will.