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Oracle's Top Challenges


My prior blog post commented on the top challenges facing SAP in the coming year. To provide a relative and meaningful comparison point to SAP and the ERP software industry in general, this post will take a similar approach to identify and propose solutions for the #2 ERP software manufacturer - Oracle.

First, settle the lawsuit with SAP. At the moment it appears SAP has violated ethical business practices, Oracle's intellectual property and the law. I'm confident SAP would like to remedy the situation to the best of their ability and implement mitigating measures to prevent future reoccurrences. Oracle's continued pursuit of this litigation beyond its legal remedies and simply to humiliate SAP in the court of public opinion may backfire. I recommend Oracle recover their legal entitlement and be gracious about a settlement.

Second, deliver a major Fusion release. Don't take the approach of delivering small and pretty much worthless Fusion components simply so you can say you made a projected delivery date no matter how inconsequential the delivery. Nobody cares about small Fusion components. ERP users from Oracle Financials, PeopleSoft, JD Edwards and Siebel CRM users care greatly about seeing the framework that will leverage these autonomous systems into a cohesive platform that will extend the value of their ERP investments into the future. The market wants to see the originally proposed Fusion release in 2008; nothing less.

Third, show some definitive and genuine direction with regard to Oracle's software as a service (SaaS) strategy. It confuses existing customers and prospective buyers when CEO Larry Ellison indicates his distaste for SaaS solutions and then says Oracle is moving to make every business application available as a hosted solution. The general consensus is that Oracle is fighting the typical hosted solution which offers thin client delivery and subscription-pricing in a futile effort to redefine software as a service and simply leverage the redefined hosted model as a marketing tool to sell more of the flagship product. If true, I recommend Oracle reconsider this strategy. Otherwise, expect to lose handsomely to SAP's Business ByDesign hosted solution.

Fourth, acquire NetSuite. I'm talking to you Larry. You know you want it. Actually, you already own it, you just want it under the Oracle umbrella. At the moment you're facing a clear conflict of interest. You are a majority shareholder in two competing ERP software companies. You're setting yourself up for another class action lawsuit (I'm sure I don't have to remind you what happened in the last one). Either acquire NetSuite or dispose of your ownership in the company.

Posted by: Jeffrey on 02.14.2008
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