Hardware trumps Fusion Apps in Ellison's big speech

But OpenWorld still provided plenty of Fusion fodder for those who cared to look

Those who attended Oracle CEO Larry Ellison's keynote address at the OpenWorld conference on Wednesday hoping to learn a wealth of new detail about the vendor's long delayed Fusion Applications likely left disappointed, but plenty of vital information was available throughout the week for those interested enough to pursue it.

Ellison's presentation largely repeated what is already known about the software, which is set for general release early next year after more than five years of development. Moreover, much of the keynote was spent on discussions of recent hardware announcements such as the Exalogic "cloud in a box", as well as verbal jabs directed at Salesforce.com CEO Marc Benioff.

Fusion Applications combine the best attributes of Oracle’s various ERP (enterprise resource planning) product lines into a next-generation suite with built-in BI (business intelligence) and collaboration capabilities.

"Nobody until now has ever been successful at building large ERP applications on top of industry standard middleware," Ellison said. He went on to touch upon long discussed aspects of Fusion Applications, such as pervasive BI (business intelligence) and its modern UI, which is the result of ample engagement and testing with user groups in recent years.

He also once again stressed that Oracle believes customers should adopt Fusion at their own pace. “It can’t be rip-and-replace.”

Ellison then left the stage as a number of Oracle executives ran through a series of Fusion product demonstrations.

Meanwhile, although Ellison's talk was thin on finer details, more than 40 "drill-down" sessions were scheduled during the conference week, along with many demo booths showcasing the software.

And there apparently is a healthy amount of interest in Fusion Applications among the Oracle installed base.

Many showgoers were turned away from a talk Tuesday by Steve Miranda, senior vice president of application development, due to a lack of space. This was a dramatic departure from Fusion Applications sessions at previous OpenWorld events, which drew healthy but far from standing-room-only crowds.

Fusion Applications will have the same codebase whether they are run on-premises or on-demand. They also use "standard vanilla" BPEL (business process execution language) for designing business process flows, ensuring interoperability with third-party tools, Miranda said.

Oracle has also rethought the concept of application customization. A key component of Fusion Applications is a special metadata layer that allows customers to tweak business processes without touching the underlying code.

For example, Oracle's code might supply a two-step process that creates a purchase order and issues an invoice, Miranda said. A company may want to add a step in between that checks the customer against a terror watch list database before completing the invoice. Oracle might update its code in the future, but that won't affect the process step created by the user.

The scope of Fusion Applications version one includes financials, HCM (human capital management), SCM (supply chain management), PPM (project portfolio management), procurement, CRM (customer relationship management) and GRC (governance, risk and compliance).

The suite is not yet fully globalized. "We focused really on Tier 1 economies around the world," particularly North America and Western Europe, Miranda said.

Oracle hasn't built out core manufacturing capabilities for Fusion either, but the initial wave includes complementary modules for areas like distributed order orchestration and inventory management.

Overall, Oracle is pushing a theme of "co-existence" for Fusion Applications, where customers take a measured approach to adoption and ease into the new applications over time.

Despite the seemingly soft sell, Oracle is laying the usual groundwork that comes with any major product launch. It is kicking off an invitation-only early adopter program, and has been working for some months with a number of system integrators which are developing Fusion Applications practices.

The co-existence theme is important and sensible, according to Forrester Research analyst Paul Hamerman. "Customers don’t want to go big-bang with Fusion. It’s just too new. Nobody in their right mind would want to go big bang because there’s a risk.”

Altimeter Group analyst Ray Wang expressed a similar view.

"Adoption of any new software product with this big a footprint means you need a concerted and deliberate early adopter program," he said via e-mail. "Users are taking some risk in exchange for earlier competitive advantage. Software companies like Oracle must make those investments in order to succeed. Soft-sell is part of the message."

Moreover, Oracle may prefer a constrained rollout because it limits the chance of a high-profile project failure -- which is the last thing the company wants given Fusion's protracted gestation period and the industry's high expectations for the software.

Meanwhile, Oracle still has to flesh out answers to other important questions surrounding Fusion Applications, such as pricing models. Those details should emerge closer to the general availability date, Hamerman said.

No doubt Ellison could have shed some light on such matters, but the most colorful section of his keynote was the trash talk leveled at Benioff. The executives have been engaging in a public sparring session in recent days, even as Benioff gave a presentation at OpenWorld for the second year running.

Benioff posted a Twitter message on Wednesday that tweaked Exalogic, saying "A cloud is many things---easy, efficient, low cost---but it is NOT a box! There is no cloud in a box."

That jab prompted a sharp repartee from a smirking Ellison.

“Clouds don’t run in a box. OK. So what does he think Salesforce.com runs on, if not on a box? ... Actually Salesforce.com runs on 1,500 Dell servers. Which are boxes," Ellison said. ... I'm sure when Marc gets back and talks with his technical people they’ll let him know you that you do need boxes. You really do.”

Ellison went on to trash the architectural concept of multitenancy, which is commonly used by SaaS (software as a service) vendors like Salesforce. Multitenancy sees customers share an application instance, with their data kept separately. This approach cuts down on system overhead and makes it easier for vendors to roll out upgrades.

"Multitenancy is a horrible idea," Ellison said. Virtualization is a much better way to manage and achieve secure separation between customers' applications, he said.

Ellison also spent time going over other OpenWorld announcements that underscored the company's ambitions to compete against companies such as IBM in hardware and integrated systems.

This was not lost on one user who attended the keynote. “I was making a mental note of the number of organizations he was having a go at,” said Gareth Webb, database infrastructure architect at Vodafone.

“As [Ellison] said at the outset, there’s been a lot of stuff announced at this conference,” Webb said.

“It’ll be interesting to see how the industry receives it,” he added.

OpenWorld continues through Thursday in San Francisco.

(Paul Krill of Infoworld contributed to this story.)

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com

Copyright © 2010 IDG Communications, Inc.

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