What Oracle Fusion CRM in the Cloud Means for Salesforce and Siebel Customers
The CRM (customer relationship management) market got a bit busier this month with the entry of Oracle's long-awaited Oracle Fusion CRM, which is also the foundation of Oracle's new Public Cloud.
As the latest entry in a very competitive market, Oracle (NASDAQ: ORCL) will have to stand out to get noticed. So how does it stack up against established offerings from the likes of Microsoft, Salesforce.com and SAP? And perhaps more importantly for Oracle's longtime customers, will Oracle Fusion CRM spell the end of CRM On Demand, its existing cloud offering based on Siebel, and Siebel CRM?
“The Oracle cloud is a little different,” said Oracle CEO Larry Ellison when he introduced the product suite at the Oracle OpenWorld 2011 user conference recently.
The Oracle Public Cloud is both a platform as a service and applications as a service, he explained.
“The key difference is the Oracle Public Cloud is based on industry standards and supports full interoperability with other clouds and your data center on premise,” he said.
By standards, he primarily meant Java. Oracle's cloud claims to run any app written in Java.
The End of Siebel and CRM On Demand?
One of the main principles of the Fusion Applications development effort was to bring the best ideas, architectural patterns and business practices of all “legacy” applications (eBusiness Suite, PeopleSoft, JD Edwards, Siebel CRM, Retek, and so on) into the new suite, wrote Alexander Hansal in his October 17 blog post.
Hansal, a technical instructor in Siebel and an Oracle consultant, wrote, “The trained eye will see typical ‘Siebel patterns' in Fusion CRM. On the other hand, the requirements for CRM have drastically changed in the last years, so there are lots of new things as well.”
Hansal said Siebel customers have three options: Stay with their legacy application by upgrading to the most mature version (Siebel 8.1.1); augment their existing legacy app with new functionality offered by the Fusion Applications stack; or ditch the legacy stuff and embrace the new Fusion world.
Customers can easily upgrade, he believes, because Fusion Applications are designed from the ground up to co-exist with Oracle's legacy apps.
Hansal concluded: “I believe that Siebel CRM is not dead. Too many hours and dollars/euros/rubel have been spent by customers in Siebel projects to naively believe that they will just dump it all for version 1 of Fusion CRM.
“While I usually don't do too much IT crystal balling, we should see another decade of thriving Siebel projects, but there is a new flower in the garden which we shouldn't neglect (translates to: WAKE UP and get TRAINED on Fusion Applications.”
Oracle Public Cloud: The Complete CRM Package?
“Oracle is the only vendor that provides a comprehensive suite of enterprise solutions in the cloud, which includes both application services and platform ones,” Trip Chowdhry, managing director of equity research at Global Equities Research, wrote in a recent research note.
Oracle's application services include Fusion CRM, Fusion HCM and Social Networks, while its platform services include Java Services and Database Services – and just this week, Oracle added cloud customer service with the acquisition of RightNow.
Oracle claims, among other things, that its Oracle Fusion CRM Cloud Service enables organizations to combine customer and product master data information with all CRM processes – which the vendor says is a first for cloud-based CRM solutions. Oracle also claims that the service delivers a consolidated customer center for all CRM business processes.
Oracle Shuns Multi-tenancy
Although Ellison indulged himself and his captive audience in taking pot shots at Salesforce, Forrester Research analyst James Staten said he believes the Oracle offering may be more of a direct competitor to Amazon Web Services than Force.com.
The strongest evidence is in Oracle's stance on multi-tenancy, said Staten, noting that Ellison shunned a tenancy model built on shared data stores and application models, which are key to the profitability of Salesforce.com (and most true SaaS and PaaS solutions).
The Oracle Cloud offering is based not on multi-tenancy, but on virtualization containers that allow customers to seamlessly switch back and forth between the private and the public clouds.
“Oracle will no doubt use its own Xen-based hypervisor, OracleVM, rather than the enterprise standard VMware vSphere,” said Staten, noting that image conversion between the two platforms is fairly easy.
While many enterprise infrastructure and operational professionals will applaud this approach, this IaaS-centric architecture is far more resource-intensive for supporting multiple customers than the Salesforce model, Staten said.
Microsoft seems to agree with Salesforce, as its Windows Azure model applies tenancy at the application level as well, he added.
A big selling point for Oracle could be that the same Fusion middleware software sold on-premises is available in the cloud and that the programming model for Oracle Public Cloud is the same open standards-based languages of Java, BPEL and Web services.
“This is in clear contrast to the walled gardens of most other PaaS offerings,” said Staten. “Microsoft comes closest to this value proposition as most open languages and web services are supported but the middleware services of Azure are not one-for-one with their on-premise equivalents.”
No doubt some IT pros will laud this architectural consistency, as it significantly eases the migration of Java apps between on-premises and cloud.
Pricing and Financials Coming
While Ellison announced a collection of cloud services – four SaaS applications and 4 PaaS services – only a subset of these appear on the cloud.oracle.com site.
Only the company's database and Java services are shown as PaaS services, with the already pre-existing CRM and human capital management as SaaS applications.
Staten said management and Fusion Financials (Oracle eBusiness Suite) are expected to follow at the SaaS layer, with a data service to supposedly rival Azure. Lots of unknowns remain for this service, the biggest being pricing, said Staten.
While Ellison talked about an AWS-like pay-per-use model, he also stated the requirement of a subscription.
As every instance will include at least either an Oracle database or a WebLogic app server, users can expect each instance to cost far more than Amazon's $0.08 for a small VM, said Staten.
