Oracle doubles down on the cloud

Last week I got out of Boston just ahead of the massive blizzard that covered much of the area with over 3 feet of snow (I was not so fortunate this week, as I watch another foot of snow fall). My destination? A much warmer and sunnier San Jose, where I spent a busy 2 days with Oracle at their annual Oracle Value Chain Summit. The main theme for the visit, similar to what was discussed at Oracle’s Open World conference at the end of the 2014 was the importance of cloud within the portfolio of Oracle solutions. Oracle also showcased the wide breadth of solutions and case studies they have in the supply chain space – a testament to the mega vendors solution portfolio.

Here are my take aways from the two days I spent on the west coast.

  • Oracle is doubling down on the cloud. The main stage sessions on Tuesday, January 27,placed a heavy emphasis on the efforts and growth of the Oracle cloud offerings. Both Oracle CEO Mark Hurd and Steve Miranda, EVP of Applications Development, spent extensive time discussing the success Oracle has seen with their cloud solutions and continuing to make the case for a greater number of solutions being moved to the cloud. Highlighting the success they have had with the cloud for their HCM (more than 950 new applications cloud customers), CX (more than 1100 new customers) and ERP solutions (more than 250 new customers), it is clear that Oracle is doubling down on the cloud for 2015. This next year should be interesting with regards to which solutions in the Oracle Value Chain portfolio get heavily invested into the cloud. Mr. Hurd has a vision of a few mega vendors providing a full suite of solutions that allow supply chain solutions to be fully stitched together. As we know, for the supply chain space that entails a complex and wide array of solutions. Oracle has already put many of these in the cloud, 2015 will be an interesting year to watch as this cloud push continues to pick up steam.
  • Oracle is happy to sell you the point supply chain solution you need. One strategy that has serviced Oracle well is their willingness and ability to sell some point solutions, which allow them to gain a foothold within accounts. Rather than always trying to push a larger suite solution sale, the point solution strategy gives Oracle great flexibility when it comes to account targeting. Organizations such as Mason Companies and Ricoh are leveraging the Oracle WMS offering to manage their distribution networks, but see this investment as a first step to address greater supply chain needs. Areas such as greater system optimization or after sale management could conceivably grow from this WMS foray. Oracle’s long running strategy of acquiring strong point solutions such as G-Log, Retek and Demantra to name a few, allows the flexibility to sell these solutions into accounts as opposed to have a “one mega size” fits all offering. Oracle will be well served to continue this tact.
  • However there remains room for best of breed providers. While Mr. Hurd argues for a handful, or fewer, of large vendors providing a one-stop shop, there will always remain room for best of breed vendors. Why? Because these mega vendors cannot service every solution and need of the user at the highest-level possible. That is no knock on these mega vendors. A recent article in the Economist pointed out that even in the world of mega vendors – such as Google in search – that smaller vendors still hold an important role. They are in existence to address specific areas that the larger vendors cannot properly address. For example, speaking with a manufacturer who looked to leverage Oracle’s global trade management (GTM) offering was disappointed in the level of maturity of the solution. They had to lean heavily on their solution integrator to fill in the gaps of the Oracle GTM offering. A candid story to say the least, but not surprising. These large vendors have such an extensive portfolio; across so many different industries that one cannot expect that each solution has received the same level of development and attention as one another. Customers need to keep this in mind when making vendor selections – sometimes a vendor that focuses on one specific supply chain problem offers the best solution.

As Mr. Hurd said from main stage “supply chain is hard,” there is no doubt about that! Oracle spent over two days giving us a host of case studies and presentations of how they are tackling these hard problems. The sessions I was able to attend provided a wide swath of stories about how companies from global automotive suppliers to General Electric Power & Water are leveraging Oracle to better manage their supply chains.

It will be interesting to watch how Mr. Hurd’s theory in the rise of the mega vendors plays out. Something to watch in 2015 and beyond.

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Filed under IT, Supply Chain, Technology

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