Dan Tynan, writing for CIO.com:

For the past decade, ERP has been the poster child for IT projects that overpromise and underdeliver. It was notorious for painfully complex rollouts that took years to implement, required massive customization, and were often only partially realized. Billions of dollars were spent just trying to get ERP systems to work as advertised.

Now ERP is back — and not just for big enterprises looking to refresh legacy systems. According to surveys by Forrester Research, roughly one out of four SMBs and enterprises plans to either upgrade their existing ERP solutions or implement a new one over the next 12 months.

We see this too. Every day.

What’s different? Isn’t ERP’s sometimes-broken promise giving way to the new promise of SaaS and cloud computing? Not just yet — ERP has been around forever, and in that time companies have learned a great deal. They now fully understand what works, what doesn’t and what mistakes to avoid. They’ve gotten their technology down, integrations minimized and streamlined, and they’ve tied smart business processes to their operations.

In short, they’ve grown up. Learned a thing or two.

Our clients tell us that while they’re looking at cloud apps, they have too much tribal wisdom wrapped up into their existing applications and business processes. Many of our clients have just now put in their first real cut at business intelligence and are using that information to make actual, real-world, daily business decisions.

Their ERP systems may be old, and they may not look as shiny as some of the new cloud platforms offered up by Oracle and other vendors, but they work. And organizations understand them completely. That’s why they aren’t afraid of expanding or upgrading their ERP systems — because finally, they’re delivering the promise that they whispered years ago.

In short, they’re finally humming.

It takes a brave soul to scrap something wholesale that is finally working in favor of something that, in essence, represents a great deal of starting over.

What’s your take? Does Tynan’s article sound like you?

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It’s clear that 2011 was the year of the cloud, with many traditional enterprise vendors accepting that the cloud is something they can no longer denigrate or ignore. The ‘cloud’ buzzword has been (sometimes annoyingly) tossed around for upwards of two years, but last year is when it hit critical mass in terms of action, not just marketing and positioning.

Chris Kanaracus, writing for IDG News, highlights a few enterprise trends we’re seeing and hearing in everyday conversations. These give real heft to the notion that the cloud is something everyone should be thinking about and/or planning around. It might not be happening right now, and it might not be top priority for you, but ignore this medium- to long-term direction at your peril.

Here’s one that struck us:

SAP buys SuccessFactors, Oracle buys RightNow, both accept cloud reality

Collectively, SAP and Oracle spent nearly US$5 billion this year to acquire software vendors based in the cloud.

Each sought different types of technologies, with SAP’s purchase of SuccessFactors boosting its human-resources software offerings as well as general cloud know-how, and Oracle’s RightNow buy giving it an array of customer-support capabilities.

But the deals have a common thread, marking a sea change for the traditional on-premise software world, said analyst Ray Wang, CEO of Constellation Research. “[It] signals the realization that cloud deployment will be the predominant approach.”

We do a massive amount of Oracle work, and what we’re hearing from Oracle and our customers is very real and perfectly synchonized: the cloud is real, it’s mature, and it’s time to start figuring out how it can help enterprise IT. It’s not just for early adopters or skunkwork labs anymore.

Along similar lines, you can’t ignore perhaps the biggest story out of Oracle, one that’s sure to mold future IT decisions for a long, long time:

Oracle delivers Fusion Applications

It took a while, but Oracle finally managed to deliver the first wave of its next-generation Fusion Applications, and its launch strategy also showed how cloud computing has influenced the enterprise software market.

The company has taken pains to stress that Fusion Applications can be deployed in a highly modular fashion, with no need to remove existing systems, and at a time of customers’ choosing. Users will also be able to run the software both on-premises and in cloud form, although some of the details of the latter remain to be made public.

Oracle’s strategy is partly a nod to reality, since few customers will rush to rip and replace their core ERP (enterprise resource planning) systems with new software, and Oracle also wants to ensure early users are successful. But its message of easier, more flexible consumption for Fusion is straight from the cloud-vendor playbook.

Now more than ever we are being asked by our clients to come in and help them simply assess: put executive/organizational expectations on a piece of paper somewhere (harder than it sounds, trust us), inventory current systems and capabilities, and plan roadmaps. Such basic blocking and tackling, but given the churn and change in what ‘enterprise IT’ will mean in three years, so important. We offer clients two very powerful planning workshops: our BluePrint Project Services and PeopleSoft Architecture Assessment, both of which are popular. Lately, we’ve been doing a lot of our BluePrint workshops, largely because of the reasons discussed a few hundred words ago: things are changing, and smart planning has never been more important.

Questions? Don’t be afraid to drop us a line. Always happy to have conversations.

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My days of selling ‘high tech’ products date back to the mid 80’s.  Since some of our blog readers were only 2 years old then, let me detail what our computing world was like.

CAD/CAM (computer aided design/computer aided manufacturing) was the product.  In order to do a demonstration of our CAD application, we had to reserve mainframe time from home office which was in Denver, Colorado.  The app ran on a PDP 11, quickly upgraded to a VAX 11-730.  WooHoo!  We would pray, yes literally pray, when the customer showed up for the demo in our office that the appropriate time change was taken into consideration as we were in Detroit and that NO ONE in the rest of the company was doing anything on the mainframe.

We were loaded with a whopping 2 MB floppy disk drive.  We proudly demoed how we could rotate a 2D image on a 19 inch monochrome screen.  Notice I didn’t say how long it took, just that we could do it!  We sold some of these monster machines.  It took massive amounts of real estate to house the mainframes that stored the information.

Then, along came Apollo workstations. Remember those? Ever hear of those?

Well, we were absolutely astounded that we could now ‘network’ several workstations together using token-ring technology.  Most of the data had to reside on a Storage Module Disk Drive (a whopping 300 MB) which was the size of a washing machine.  But, the fact that we could send data from one workstation to another was, well, amazing.   Sun eventually took over the market, but Apollo was the trailblazer.

Then came the PC.  (I think I’ve now caught up with most of you and your generations!) You all know how the PC started bulging with applications, data, capabilities – but it was a personal device even though it had huge towers and disk drives under our desks that stored and processed the data.  As the market matured and miniaturization came into full force, the laptop gave us mobility and much more memory capability. Hardware-wise, that’s still the focus today. I don’t know too many people buying desktop towers anymore.

But even further, now we put stuff in the cloud!!  My non-techie friends and I want to know where this cloud is.  Doesn’t it seem like we’ve reverted right back where we started?  Putting data into massive storage devices sitting in real estate…somewhere. This might seem basic to younger students of IT history, but for those of us who lived the transitions, it’s very interesting to see things come full circle (ideologically speaking)!  We used to laugh that someday CAD/CAM and other apps would be running on our wrist watches.  Our prediction wasn’t too far off – they just run on our phones instead.

My point?  I shake my head and laugh at folks who complain about speed of search engines or downloading an app (for a more humorous take, here’s comedian Louis C.K. observing that everything today is amazing and nobody’s happy).  I think back to the days of having to make a reservation days ahead of time in order to do the same thing.  Just imagine what your kids will tell your grandkids about the slow technology they grew up with.

Amazing.

Thus endeth my reverie. Happy new year, everyone!

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Barb Darrow, GigaOm:

Wolf’s numbers show that a select group of SaaS companies saw their values grow 313 percent from January 2009 to October 2011, compared to 154 percent growth for other software companies over the same period.

No wonder Oracle shelled out $1.5 billion for RightNow Technologies and Salesforce.com keeps snapping up smaller SaaS players every month.

“With Saas, the more vertical the better,” Wolf said in interview. SaaS companies offering financial services, healthcare services or employee benefits outsourcing services, are all hot now, he added.

So who’ll be buying? The usual suspects: IBM, Oracle, SAP, Microsoft.

Increased valuation begets consolidation, and SaaS is where all the buying is going to be happening. That much is clear. But this bubble, as it were, seems awfully vulnerable to macroeconomic factors and externalities. And as legacy software companies acquire SaaS players to broaden/deepen their portfolios, eventually valuations will get pretty muddy.

Something to watch.

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I missed this a while back, but Vinnie Mirchandani always has interesting takes. Here’s what he saw when he watched Oracle CEO Larry Ellison give his keynote at this year’s Oracle OpenWorld:

Larry Ellison could have been somber – if he knew of his friend Steve Jobs dying he did not let on. He could have been pissy about the Marc Benioff incident in the morning. He could have been lethargic – the Infosys session that preceded his put the lady sitting next to me to sleep. Instead he was in fine fettle – humorous, sarcastic. Probably the most enjoyable OOW keynote I have seen from him in a few years.

Why?

Oracle arranged for several sessions with its Apps leadership team and several of the Fusion early adopter customers. The range and size of the customers was impressive (I spent time with senior IT and finance execs from large aerospace, mortgage, restaurant chain, federal agency, insurance, electronics firms) – as was their pragmatism. The majority were happy to be on-premise liking future flexibility to move to a SaaS or on-demand mode. Their major drivers – instead of doing a major upgrade on an existing Oracle apps platform (JDE, PeopleSoft etc) why not go with a more modern Fusion architecture?

Interesting to note that the standard upgrade junction/opportunity is making organizations consider Fusion. Some six months ago, the idea of Fusion being looked at for the next upgrade cycle was a fantasy. Now, it’s happening — for real. But is it perfect for all organizations? No –it’s still a fledgling rollout, no matter how you cut it.

Fusion is also inconsistent in its depth – richer in core financials, HRM and CRM functionality than other parts of the enterprise, and the vertical journey to migrate Retek, i-Flex etc has just begun, though Thomas Kurian , EVP Product Development gave me a confident response on the speed at which that verticalization will proceed.

Consider Fusion, but do so realistically is the takeaway here. In many of our client conversations, there’s a lot of interest in Fusion, but once the surface is scratched and pragmatism seeps into the discussion, few are ready to move away from a mature PeopleSoft system just yet.

If you have questions or comments about Fusion, its adoption and what it means for PeopleSoft, please let us know. We’ll be happy to talk. No pressure, no pitch. We enjoy talking Oracle to anyone.

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Two days ago, Oracle acquired RightNow for $1.5B, and many analysts immediately said the purchase was, for all intents and purposes, missiles aimed at Salesforce.com.

But  how? What does this mean? How to decipher this? What does the acquisition do for Oracle? Won’t Oracle’s ‘Public Cloud’ be comprised of technologies already in Oracle’s stack?

Not exactly. According to ZDNet’s Phil Wainewright (and Larry Dignan), Oracle’s purchase of SaaS pioneer RightNow basically signals Oracle’s intent to go cloud shopping and pick up a slew of tier 2 SaaS players.

With the acquisition of early SaaS pioneer RightNow Technologies, Oracle has signalled its intention to build out its Public Cloud offering with what will likely become a string of acquisitions of second-tier SaaS vendors. I’m in total agreement with my ZDNet colleague Larry Dignan that the official press statement was “basically shorthand for ‘Oracle is going cloud shopping’.”

So who might be on the list?

I’d expect the shopping list to include public companies including Taleo and several others in the talent management sphere, along with ServiceNow.com in the IT service management space and various less well known names from other sectors.

Things are going to get interesting in the next few months. The most interesting part of all of is is the ideological shift that’s taking place: Oracle might not be building out its Public Cloud with primarily in-house technology; it plans on creating it via acquisition. And we all know Oracle’s extremely good at identifying smart acquisition targets.

Popcorn, anyone?

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Carolyn Duffy Maran, reporting for NetworkWorld:

The outlook for IT budgets is solid, with 83% of survey respondents reporting that their 2011 IT budget was greater than or equal to their 2010 IT budget. This figure compares to 48% reporting stable or growing IT budgets in 2009.

Similarly, 85% of IT executives are predicting that their 2012 IT budgets will be greater than or equal to their 2011 figures. Only 65% of respondents made this prediction two years ago.

Another positive indicator is that IT budget allocations will remain steady in 2012, with internal staff expected to receive the largest share of the pie at 37% of spending compared to 38% this year.

Also note the outlook on outsourcing, forever IT’s boogeyman in the closet:

The SIM survey indicated no plans by management to increase offshore outsourcing, which has been a fear among IT professionals over the years. CIOs reported that they spent only 2% of their 2011 IT budgets on offshore outsourcing and 3% on domestic outsourcing. For 2012, they are projecting the same level of investment for offshore and domestic outsourcing.

And finally, don’t underestimate this surprising finding regarding cloud computing spend:

One surprise finding was that CIOs are not planning to allocate a significant amount of their IT budgets to internal or external cloud computing services. Although cloud computing was listed as one of the top applications that CIOs are investing in during 2011, they are spending only a tiny amount of money in this area: an average of 6% of their 2011 IT budgets on internal cloud projects and 5% on external cloud efforts.

Emphasis mine. Interesting that despite all the marketing and the buzzworthiness of cloud computing, the pursestrings are still on hold. Maybe it’s a value realization thing — that cloud, while promising, can’t be presented to the C-level in terms of actual ROI yet? Maybe it’s the backlog of IT services that have been neglected over the past few years, so cloud is hot, but not as hot as things that have been on the to-do list for 24 months?

ERP salespeople, take note: there’s still unmet demand out there. Enterprise cloud/SaaS salespeople: your challenge is to prove that the cloud is now, the value is real and time time has come for private clouds.

What’s your take?

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The Register’s Timothy Prickett Morgan scoops what is some of the best (and latest) Oracle Fusion information I’ve seen. Here he is with the overview of the modern-day Fusion, what it is, and how it’s built:

Ellison started off talking about the Fusion apps, a reworking from the ground up of all the business logic embodied in the Oracle E-Business Suite, PeopleSoft, Siebel, JD Edwards, and other applications that the software giant has either built or acquired in the past 15 years. The plan, said Ellison, was to get these Fusion applications out the door in four years, but it took six years. The Fusion suite is written in Java and uses BPEL as a means of linking the apps to outside applications. It includes more than 100 modules encompassing financial, human capital, supply chain, and project portfolio management as well as procurement and governance and compliance apps.

For our more visually-inclined readers:

(Click to enlarge)

But the most interesting aspect of this latest volley of Fusion information is Larry Ellison’s edgy, almost pugnacious presentation of the what the Fusion-powered Oracle ‘cloud’ is, especially as it relates to proprietary clouds, like, he says, those powering rival platform Salesforce.com. For those who missed the drama, note that a year ago, Benioff tweeted, during an OpenWorld keynote, “Beware of false clouds.”

Ellison didn’t pass on the opportunity this year to swipe at Benioff’s comment.

“That is such good advice. I could not have said it better myself,” Ellison sneered, rattling off a list of differences between the Oracle Public Cloud and Salesforce.com. The Oracle cloud is built on “standards,” by which Ellison meant Java, BPEL, SQL, SOA, Groovy, Web services, and so on, while Salesforce.com is a proprietary cloud platform with proprietary applications, with its APEX language, the Heroku platform cloud, and extensions like Force.com, Appforce, Siteforce, and vmforce.

By contrast, the Oracle cloud runs glatt kosher Java and supports Oracle’s database and Fusion middleware, which means you can run your applications on premise, in the Oracle Public Cloud, or even Amazon’s EC2 cloud. Salesforce.com’s applications, said Ellison, run only on its own cloud.

“It’s kind of the ultimate vendor lock-in,” said Ellison, winding the crowd up. “You can check in, but you can’t check out. It’s stickier than a roach motel.” He paused for a second and then added: “It’s like an airplane you fly into the cloud and you never come out.”

Ellison also took a few swings at Salesforce.com’s multitenancy model, which, he says, was a good idea 15 years ago, when people had no other options. Today, that’s no longer the case.

Fusion is just taking shape for many people, and it’s becoming clearer that it’s a cloud-powered, elastic layer that will use BPEL and other web services to connect your existing applications and data stores. It’s a major shift for Oracle, but one that I admire — the company couldn’t evolve without it.  Is it formidable? Of course it is — it’s Oracle, after all. And how can you not admire an enterprise company who communicates so boldly and plainly?

What are your thoughts? Is Fusion what you thought it would be?  More? Less? Still need a better understanding of what it is and where it will fit into your business?

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A bit of unsung news for database professionals is coming out of Oracle. Here’s the skinny:

Today’s economy requires IT management to justify the cost of every purchase while ensuring their teams are more productive, agile and versatile than ever before. These pressures filter down to the individual developer, administrator and analyst, who often have to do the work of two or three people.  And in the database world, a Big Data and Cloud revolution is changing the way database professionals develop access, manage, and analyze data. Amidst this sea of change, the majority of Fortune 500 companies and more than 2 million individual database professionals continue to rely on one tool as they have for nearly 15 years. With the release of version 11, Toad® for Oracle again proves why it is the most popular, most comprehensive tool for Oracle database management on the market today.

So what are the benefits? Flexibility, automation, and a better assurance that applications sent to production are of a higher quality.

If you’re a database administrator, be sure to check out the entire list in greater detail, courtesy of SD Times.

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Bill Kutik talks about Oracle’s perception problem with Fusion after their five years of secrecy, what the early adopters so far look like, and how customers are slowly looking at Fusion in earnest. But an interesting subplot is the Oracle v. Workday cage match that’s going on, one that will be ultimately considered a function of time if Kutik is correct:

What nobody talks about publicly is Oracle’s effort to derail Workday’s late-stage sales efforts to Oracle clients. Again, business as usual: It’s called capitalism. Apparently, it may have contributed to Workday’s not signing Charles Schwab, but Oracle’s efforts failed at Thomson Reuters, which was recently announced as a Workday customer.

That’s the cage match to watch going forward — with Workday currently having the advantage of older battle-tested software, being able to pursue larger customers and 230 of them already signed. But given Oracle’s much larger size, resources and installed base, those Workday advantages will shrink over time.

Fusion became generally available on June 1, Leone says, and now anyone can buy it, though still with careful qualification.

Leone confirms that Oracle is looking to HCM as its best source for larger company Fusion sales.

It will be interesting to see how Fusion gets a foothold in the market and builds momentum. It’s been a long five years, and people are interested for real developments and releases. We hear it firsthand every day.

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