Best CRM
CRM search»Oracle»Oracle Open World 2012

Chuck Schaeffer Oracle OpenWorld 2012 — CRM & CX Take-Aways

4 stars Average rating: 4 (from 67 votes)
By Chuck Schaeffer

I set out to Oracle OpenWorld this year to answer two questions. First, how serious is Oracle about making Customer Experience (CX) the next growth technology sector? And second, how well is Fusion CRM being adopted in the marketplace, and why?

Oracle Customer Experience

CRM software is a mature market that hasn’t really changed that much over two decades. The way businesses manage accounts, contacts, activities, opportunities, campaigns and cases is relatively unaltered. We have seen innovation in cloud delivery, social CRM, mobility and big data, but core CRM software capabilities remain fairly constant. Interestingly, one of the core objectives that has remained elusive since the beginning of CRM is achieving a customer-centric business model, and this void has opened the door to Customer Experience Management (CX or CXM).

A customer’s experience is the emotional opinion of his supplier based on the sum of all interactions with that supplier. With a stagnate economy, increased focus on existing customers, the rise of social customers and companies quest for a more sustainable competitive advantage, business leaders are rapidly turning to CX as a business strategy, and technology suppliers are stepping up to facilitate this strategy in different ways.

While some technology providers see CX within the domain of Customer Relationship Management or existing enterprise software applications, Oracle sees it differently. To Oracle, the CRM system manages key customer facing transaction processes for marketing, sales and service, but falls short in delivering real-time content and knowledge at the plethora of customer touch points and channels such as ecommerce, point-of-sale, sales order processing, shipping/delivery, returns, warranties and more. To accommodate all these channels, Oracle is betting big on purpose built Customer Experience software technology.

Oracle CX is the company’s enabling technology to facilitate CX strategies, and is a suite of integrated point solutions that have been largely acquired over the prior three years. In a move that’s unusual for Oracle, the company is positioning itself as a market leader, or possibly a market maker, in creating the industry’s CX messaging, and enabling software, and trumpeting the virtues and benefits of CX software solutions.

Oracle’s messaging and promotion is off to a good start, however, hitting some road blocks that must be resolved in order to both create and capitalize on the CX software market opportunity. First, more than a few CRM pundits and thought leaders don’t agree that the Oracle CX objectives fall outside traditional CRM software, and question whether Oracle is diminishing CRM in order to create new marketing messaging and find a unique market space to capitalize. Second, while business executives clearly get the strategic importance and general understanding of CX, they haven’t yet figured out how to navigate the complexity in deploying CX.

The deployment challenges are many: Creating corporate culture around CX, solidifying measureable objectives, deciphering the right KPIs, delivering real-time, consistent and contextual content at every customer interaction across many fragmented channels, coding complex system integration and delivering the right actionable business intelligence as part of a closed loop system for continuous process improvement are precursors standing in the way of CX deployment. It’s easy to suggest that a CX implementation should take a phased roll-out; start small and expand. However, CX requires a supporting business culture and holistic approach. Starting small without a big picture plan for predictability, risk mitigation and forecasted outcomes will likely incur stalls, stops and restarts, and may jeopardize the entire effort. For Oracle to succeed in its CX positioning, it must expand its promotion, better illustrate its unique capabilities with CRM thought leaders and influencers who challenge the entire notion, and deliver guidance to business leaders in how to deploy CX with minimum risk and predictable payback. Failure to follow through on these requirements will sacrifice the Oracle CX software suite in favor of customers simply acquiring the piecemeal components individually, and leaving Oracle void of the synergistic opportunity the combined pieces offer when delivered as an orchestrated suite.

Oracle Fusion CRM

Oracle Fusion was of course released at last year’s OpenWorld, so the question this year is how is the suite being received in the marketplace? Larry Ellison disclosed the company has about 400 Fusion customers one year in, near evenly distributed among Fusion CRM, Fusion HCM and Fusion ERP, with about two thirds being deployed in the cloud.

Mark Hurd disclosed that Oracle now earns about $1B annually from software as a service, making it the second largest SaaS company. However, those revenues are derived far more from RightNow and Taleo than Fusion products. With 380,000 customers, only having 400 Fusion customers one year in shows progress, but is far from setting the woods on fire. I spoke with several Fusion customers to determine the Fusion advantages, disadvantages, likes and dislikes. A few themes developed.

First, the benefits are well understood by customers. Fusion’s modern architecture and very flexible deployment options of cloud, SaaS, on-premise or a hybrid combination thereof, were seen as the biggest advantages. Interestingly, not one customer or prospective customer had any real concerns about Fusions single-tenancy model or how this compares to the oft debated multi-tenancy database model from rivals such as

However, reservations with Fusion singled in on two factors—product stability and Total Cost of Ownership (TCO). The stability factor was really just a function of being new. Many CIO’s avoid version 1 software and instead let time pass for the product to mature. However, the TCO issue was a much bigger issue for most business leaders with whom I spoke, and most divided TCO into two sides—subscription pricing and deployment fees. Business leaders indicated they see the benefits of SaaS and many would prefer to go to SaaS, however, with the current Oracle SaaS pricing, the price is materially higher for SaaS than on-premise over the anticipated life of the application software. Additionally, most executives believe that the implementation of Fusion is far from routine, and will incur significant professional services and system integration fees. As one CIO put it, “it’s a big win for the system integrators, but not so much for the customers that have to pay their fees.”

Oracle Fusion CRM cloud pricing may seem high depending upon your perspective and reference points. If you compare Fusion CRM to Oracle OnDemand or cloud competitors such as, the price is high. If you compare the Fusion suite SaaS pricing to competitors, there’s not much to compare to, and quite likely the reason why the price is high. Oracle is early to market with a complete cloud business software suite. There are competitive suites, but not many, and the lack of competition will likely keep the pricing elevated for the foreseeable future. And don’t expect traditional Oracle rivals such as IBM, SAP and Infor to release similar cloud business software suites which would then introduce new competition and more aggressive customer pricing. SAP and Infor are behind the eight ball with regard to cloud suites so competition will instead come from best of breed players such as Microsoft, Salesforce, Workday and other smaller but more innovative providers.

Clearly, Fusion TCO is holding back both existing and new Oracle customers. Whether Oracle has correctly calculated optimal pricing elasticity for maximum customer adoption is unclear. What is clear is that until the enterprise software competitive landscape expands, Oracle will not feel the pressure to lower SaaS subscription fees in order to win business away from competitors. End

How would you rate this article?   

CEM category
 Filed In Categories: Oracle
CEM definition tag
 Tags Tags: OpenWorld
 Permalink Permalink:
Author  Author: Denis Pombriant
 Share Share:    Bookmark and Share



Share This Article




In a move that’s unusual for Oracle, the company is positioning itself as a market leader, or possibly a market maker, in creating the industry’s CX messaging, and enabling software, and trumpeting the virtues and benefits of CX software solutions.


More Articles By Chuck


Related Articles



Best CRM Software

Follow Us

crm search

Home   |  CRM  |  Sales  |  Marketing  |  Service  |  Call Centers  |  Channels  |  Blog