So is there a way to balance the two issues, maintaining a large customer base that often wants, at least for some length of time, to see incremental product improvement but avoid disruption; and prevent new innovators from rendering the vendor and its products obsolete. You can't really talk about this much in a generic discussion, the specific industry twists impact it too much. So let's look at this in the enterprise software context. No one would deny that we're in the middle of several shifts that have to some extent, disrupted the enterprise software markets. The overall market has been consolidating for 7-8 years anyway, so the landscape is mostly a few very large vendors, a few successful mid-size companies with momentum in the new technologies or in some highly specialized niche, and then a bunch of start ups driving disruption, but most often being bought up by the large and medium vendors when they prove out the new technology.
Last week I attended two different vendor events, and what I learned at those events started me thinking about this topic again. While there are many new technologies that are tied to the changing nature of enterprise software, there really are four major technology shifts (social, mobile, big data and cloud) and a massive business and cultural shift brought about mostly because of the impact of the Internet on business and the personal use of technology. How vendors are dealing with the four tech shifts is I think, a decent indicator of their overall ability to adapt and continue to be successful. The two events that triggered this post; Infor's 2013 customer conference, Inforum; and Oracle's annual analyst summit. Let's look at these two vendors and see how they're dealing with the change.
Infor, while not so old itself (it was spun out of SCT in 2002 as Agilisys); is made up of a series of acquired products from much older technology companies. Before its current management team, many had written Infor off as a company where old enterprise software goes to die. That all changed two years ago with some fresh investments and a new executive team led by ex-Oracle President Charles Phillips. The Infor I saw last week is a very different company than it was 2 years ago, with some very fresh ideas and products.
The overall approach that Infor is taking to modernize its portfolio is somewhat different from what we're seeing from other traditional software companies. Rewriting each of the underlying products on a new platform, or consolidating them on a single platform, would take many years. It took Oracle 7 years to write Fusion Apps, based on the best business processes from PeopleSoft, EBS, JDE, Siebel, etc. If Infor took that approach today, the product would be ready by maybe 2019-2020. Instead Infor needed a way to provide a new user experience, easily integrate across all the portfolio, support platform agnostic mobile, support cloud, more easily support a hybrid IT environment and provide embedded social. They have done this through a new middleware product called ION (Intelligent Open Network). ION takes XML outputs (all events and transactions) from any application and uses that format to integrate Infor apps as well as other 3rd party or in house built apps. ION also includes workflow, business process management, decision support and even data warehousing of all of the XML docs created (now available in the cloud as well).
One of the biggest complaints from customers relates to the dated and unpleasant user experience (UX) of many traditional enterprise systems. To overcome this issue Infor built an internal creative development organization called Hook and Loop, responsible for "creating experiences people love". The group is made up of ~82 designers, writers, developers, filmmakers and other creative individuals and is mostly focusing on UI design at present. The examples of the new UI that I saw at Inforum are very modern, clean and usable.
Infor is trying to approach the enterprise apps market with a deep vertical lens. This is, I suppose not surprising for a couple of reasons. First, I think that more companies are insisting that their enterprise apps be a a better fit to business requirements and industry vertical focus is important in that respect. The other reason it makes sense for Infor is the broad portfolio of products. Each of the acquired products and suites have specific vertical strengths that Infor can leverage as it builds out deeper micro-vertical functionality, much like Oracle in that respect.
In addressing the technology shifts, particularly around mobile, social and cloud, Infor made several relevant announcements. From a mobile perspective it is taking a device agnostic approach by using HTML5 to provide mobile "anywhere". Infor's social product is called Ming.le and follows the concept of providing social capabilities inside the enterprise workflow by embedding the ESN into the apps. This is key for getting broad adoption and IMO, the most effective long term strategy. Most traditional EA vendors are taking an approach to cloud that provides customers the choice and flexibility to choose the deployment and licensing methods they prefer. This hybrid offering model seems to be the most logical way for traditional EA vendors to compete in the short to mid term. Most of the apps are single tenant and are offered in the SaaS subscription model, outsourced, and on premises. There is also an IaaS offering to help with the hybrid deployments.
Oracle is taking a somewhat different approach that combines organically developed products on the Fusion platform with acquired apps. The next generation of Oracle apps, particularly in the public cloud portfolio is a mixture of Oracle Fusion applications and acquired apps and services. From a deployment model perspective it too is taking the hybrid approach, with the continuation of the Apps Unlimited products with the new Fusion apps plus the Social Relationship Management (SRM) and the Customer Experience (CX) solutions. Oracle of course, has the luxury of having a next generation apps suite in the Fusion product line that it started developing 7+ years ago to use as a foundation for its new cloud portfolio. In addition to this, Oracle has a broad set of vertical offerings built out of both acquired products and organic solutions, mostly on premises today.
To address the changing technology Oracle has developed a mobile development platform that can standardize mobile across all products. On the social front I already mentioned the SRM solutions, which are cloud based and include the Oracle Social Engagement and Monitoring Cloud Service (social media monitoring and response), Oracle Social Marketing Cloud and Oracle Social Network (OSN). The OSN product is Oracle's ESN and is becoming more embedded inside the Fusion Cloud apps workflow with each release. The SRM solutions are tied closely with the CX solutions, since social business and customer experience, as strategies and technologies, overlap significantly and are critically connected. I won't list all the CX products, but you can find them here.
From a go-to-market perspective Oracle is focused on continuing to offer hybrid solutions and customer choice for licensing and deployment models. That said, the company is really putting a lot of effort in building out a broad public cloud portfolio. The overall market is moving there, but honestly I'm not sure how fast that movement is happening, especially in core apps like financials that most enterprise companies have on premises and don't want to replace anytime soon. Investments are being funneled to solutions that offer quicker and higher return like ESN's and CX. Oracle has built and acquired quite a broad set of services, now it must move quickly to complete integrating those acquisitions and in simplifying its messages so that businesses can understand the Oracle Cloud. I heard Oracle start talking about solution sets more at the recent event, something I think is critical for the future. CMO's, for example, really need help sorting out a complete marketing cloud portfolio, something that Oracle is positioned to do.
Both Infor and Oracle are "work's in progress", but they both are making aggressive moves to meet the changing technology and business environments. Their approaches and how well they execute them will prove out over the next few years, along with several competitors.