| By Chuck Schaeffer
Update From Oracle Industry Analyst World 2013
I’m on the return flight from Oracle Industry Analyst World and putting some thoughts to the keyboard. Oracle used the 2+ day event to share their vision, update their progress, have customers share their stories and gather feedback from some of the industry’s most recognized analysts, influencers, thought leaders and skeptics.
Mark Hurd led the discussions of Oracle’s most pressing strategies, which he described as the company’s top 6 business initiatives of engineered systems, cloud, social, mobile, Customer Experience (CX) and Big Data/Analytics. While much of the content is subject to NDA, there are some overriding themes that steer Oracle’s position in the competitive marketplace as well as technology positioning that influences its relationship with customers.
Disruptive Technologies Permeate Oracle Strategy
While Oracle wasn’t first to embrace any of the disruptive technologies that now define their strategies and permeate their products, they have listened to their customers and the marketplace and in typical fast follower motion, have integrated several of these technologies into their business applications.
At a macro level, CEOs have put a bulls eye on the 75/25 (lights on/innovation) IT spending habit. And most CEO’s I speak with don’t count application modernization as innovation in and of itself, as technology refreshes achieve efficiencies and cost savings but don’t directly speak to the CEO’s agenda — which more often seeks technology innovation to i) acquire more customers, ii) sell more stuff to customers, iii) keep more customers, and then iv) do the prior three mandates with greater predictability and lower costs.
To these ends, IT leaders are partnering with their CEOs and heeding marketplace lessons. For example,
- 80% of business leaders believe the cloud is a springboard to more agility and innovation
- 90% of fortune 500 companies will have a big data initiative in place by the end of 2012
- 90% of companies will support their applications on personal mobile devices by 2014
- 65% of companies say that social media is a significant or critical risk to their brand reputation
Oracle isn’t alone in embracing these disruptive technologies but they are clearly carving out a unique position in the increasingly crowded marketplace. Oracle’s engineered systems have transitioned this software company into software and silicon company. Mark Hurd is emphatic that the Sun acquisition is one of the most important and profitable acquisitions ever completed, and there’s much more in the way of Engineered Systems coming. But as I haven’t met the CEO who appeals for more hardware to help achieve the company’s top business objectives, I’m going to focus on the disruptive technologies more aligned to customer acquisitions and revenue enhancements.
Oracle’s cloud strategy is a two-fold approach of customer choice and cloud breadth. With customer choice, Oracle takes an all-the-above strategy by making software delivery available in the Oracle cloud, a public cloud (i.e. Amazon, Rackspace), a private cloud/on-premise or a hybrid combination of the preceding. Customer choice is always a good thing, and this ubiquitous cloud approach also offers flexibility and portability for customers that may want to keep their applications but change their delivery option or cloud provider based on their particular (uptime, security, SLA, cost or geographic location) objectives.
In terms of cloud breadth, Oracle takes a top to bottom approach, with a cloud stack that includes IaaS, PaaS and SaaS. It’s a continuation of the larger theme of not perpetuating the old model of mismatched components and forcing costly system integration.
Oracle IaaS includes Elastic Compute and Storage services, and lends itself to a federated approach for scale. Oracle PaaS includes database, middleware and analytics services. Oracle SaaS is the (CRM, ERP and HCM) apps suite, including both Fusion apps and other native cloud apps (Taleo, RightNow, Oracle CRM on Demand, etc.) Oracle also includes social software in their cloud continuum, somewhat as a separate cloud layer which I find a bit odd, as it would seem more in line to include social in the SaaS layer.
The Oracle cloud strategy is early but promising in terms of leveraging new technology while at the same time mitigating two increasingly cited cloud problems: cloud silos and loss of control and visibility.
Oracle’s social strategy is to enable organizations to build social relationships with prospects, customers, influencers, partners, candidates and employees using social media tools to listen, engage and market.
Oracle Social Relationship Management is the banner which includes solutions for social listening and engagement, social marketing, internal social networking, and social data and insight.
Social listening is now a simple concept but continues to challenge companies in terms of filtering the signals from the noise and getting a better handle on sentiment analysis. As a result of its Vitrue and Collective Intellect acquisitions, Oracle’s capability to respond to these challenges with sophisticated tuning is much better than most.
When creating social listening topics, Oracle begins with the typical keyword based approach but then permits more granular filtering and honing of categories to produce more relevant and specific listening results. Oracle’s filtering of traffic/sentiment by indicators (topics/categories) is an early form a latent semantic analysis. Determining social sentiment (negative, neutral or positive) is still a work in progress, but this solution is well ahead of the pack.
Social listening can see and respond to messages by channel, filter messages (by keyword, type, attribute) to respond to, assign or route messages, or even forward content into an (RightNow) incident if it’s a customer service issue.
Oracle social publishing permits staff to create a post for marketing purposes. Publishing may select designated social channels, perform geo-targeting, schedule posts or even integrate a Facebook page with ATG for ecommerce.
One criticism is that I think Oracle is somewhat short sighted in applying traditional campaigns to social marketing. Social marketing is not just a new social distribution channel to market through, but also a chance to apply native social marketing methods designed to reach your recipients and their social spheres by using digital techniques such as contests, sweepstakes, polls and gamification. I’m hopeful we’ll see more native social campaigns applied to social marketing in the near future.
Also, I think Oracle is limiting itself in the area of social service. In large part from its RightNow acquisition, the company offers the basics of web customer service, some cross-channel contact center support and knowledge management, but the solution is incomplete with regard to more inherently social capabilities such as delivering service over social networks, seamlessly traversing cases over multiple channels, enabling peer to peer help communities and using more innovative social techniques which both satisfy users and deflect inquiries to lower cost delivery channels.
According to Oracle, their CX strategy originates from 3 observations: They way customers engage companies has changed, purchasing power has clearly shifted to customers and the demand for vendor responsiveness has accelerated and continues to do so. Among these observations and a mountain of market research consistently showing that CX has become a top CEO objective, Oracle is all-in for Customer Experience (CX).
While many CRM software vendors are capitalizing on the CX movement by rebranding their application software, Oracle has taken a different approach. Oracle CRM solutions have been sidelined as ‘cost of doing business’ applications. The company’s product positioning suggests that you have to have CRM, but as the industry is somewhere between mature and saturated, CRM software isn’t going to deliver competitive differentiation. Instead, CRM software aligned with a portfolio of other business apps which collectively route relevant, personalized and contextual content or knowledge to the person or customer interaction where it can be applied in real-time to deliver a consistent and rewarding customer experience is the enabling technology to retain more customers and grow customer share.
Oracle is proposing a single-vendor solution that spans the customer touch points which support an end-to-end customer journey.
As the original author of the above diagram (my friend Esteban Kolsky) reminds, the customer journey is not really a lifecycle but more of a continuum (i.e. it has no beginning or end else you are missing the point).
The Oracle CX strategy is all about an end to end approach, supporting every customer interaction from need through recommendation, across all channels and customer touch points. The company believes it stands in contrast to the many niche CX solutions which contribute to an overarching IT complexity and higher TCO. It’s a valid point, but the challenge is that most companies don’t begin with a blank slate and have existing IT investments that are not ready to be retired.
Oracle’s mobile strategy is to deliver engaging mobile apps on any device using a single codebase. This cross platform and ubiquitous device approach includes smartphones, tablets, laptops and desktops, but more so, also includes cross-human interfaces such as single touch, multi-touch, voice and visual.
Mobile is inherently built into the business apps, and from the iPad Tap demo I enjoyed at the last OpenWorld, Oracle is clearly leveraging native mobile design, navigation and an overall strong user experience. The challenge I see hear is the trade-off between single codebase mobile apps, and native mobile apps that better exploit the hardware which they operate on, though I think this challenge may be gradually remedied with advances in HTML5 and ancillary technology.
Oracle’s analytics strategy is to deliver a full Business Intelligence (BI) suite, exploit calculation speed with in-memory processing, support unstructured data, offer choice in delivery and deliver packaged analytics.
At a high level the analytics strategy is sound and far ahead of many business application competitors. While business strategies that rely on speeds and feeds don’t normally get my attention, the benefit for in-memory computing is real and significant in a BI context. And I’m in full agreement with their “BI everywhere” approach which embeds analytics within the business apps for a contextual presentation delivered by task or role. They’re still not fully delivering on this plan, but it’s a work in progress and a great direction. I also applaud their efforts to identify and deliver packaged analytics in order to jump start the BI journey.
I’m somewhat at odds with a few of the core tenants of their big data strategy. For example, there seems to be an overarching desire to want to normalize and store big data (in HDFS and key value stores) so that it can be assimilated with other data. I get the reasons for this approach, but this is pre-big data thinking. We have to recognize that with a continued forecast for an exponential rise in unstructured data (which makes up over 80% of all data and is growing 15 times faster than structured data) we can’t keep trying to control and store data within our own servers and structured data tools. It’s neither practical nor cost effective. Instead, let data live in the wild, let it exist in its native form and develop strong search, access and sync tools to extract data when needed.
Big data use cases and objectives are different than for structured data. Don’t try to force big data into the schemas, tools and scenarios best served by data warehouses and OLAP. They’re meant to be complimentary not unified. Sure, when a big data source is identified as adding value to your structured data, go ahead and run it through the ETL (Extract Transform Load) process, but this is the exception of big data, not the rule. Attempting to normalize the increasing volumes of big data is futile.
Oracle recognizes that despite technology innovation, enterprise companies are not apt to discard their existing IT investments in wholesale changes. And their product strategies may actually align technology investments with strategic application utilization.
For most enterprise companies, systems of record (i.e. HCM, CRM or ERP software) are not designed to deliver competitive advantage, but instead to provide the infrastructure for structure, standardization and end to end business process automation. These systems are reluctantly and infrequently changed.
Tactical systems may include bespoke, specialty or packaged applications and are designed to achieve competitive advantages. These systems are acquired or replaced more readily, so the ability to plug and play these apps — or at least deploy them without excessive system integration or fork lift upgrades — with flexible systems of record is a boon to both IT and business leaders.
Cloud systems, whether infrastructure, platform or software, are being used for business purposes such as agility and speed as well as for piecemeal work such as social collaboration and widely distributed data collection. IMHO, these solutions will increasingly span a large spectrum from strategic to temporary, even disposable. The ability to simply, quickly and cost effectively consume cloud solutions at any layer in the cloud stack will accelerate business innovation and empower business leaders to more quickly act upon their learning, their customers’ expectations and their ability to outperform competitors.
Oracle clearly understands this, and is positioning an end-to-end, top to bottom IT infrastructure of systems of record, tactical systems and cloud systems. The company is also leveraging open standards and flexible deployment options in order to let customers acquire or consume these apps in less than wholesale changes. However, procuring piecemeal apps will not realize the most material benefits and is costly in terms of deployment and integration. It’s now up to Oracle to find that fine balance where customers can acquire individual components as they need them and in a cost effective manner, while at the same time providing an on ramp to a complete suite that delivers the most strategic benefits.