Oracle's long-awaited Fusion Applications to launch in 2010

Fusion Applications will combine the best attributes of Oracle's various business software lines and will be 'SaaS ready'

Oracle plans to launch its long-awaited Fusion Applications in 2010, and they will be deployable both on-premises and as SaaS (software as a service), CEO Larry Ellison said Wednesday during a keynote address at the OpenWorld conference in San Francisco.

Fusion Applications, which Oracle first announced several years ago, will combine the best elements of Oracle's various business software product lines into a next-generation suite. Oracle has placed special emphasis on improving the user experience with Fusion, as well as embedded BI (business intelligence) throughout the applications, Ellison said.

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Ellison's keynote contained the most specific information the company has provided about Fusion Applications since first announcing the project several years ago. The CEO took pains to tell the packed room of Siebel, JD Edwards and E-Business Suite users that Oracle has no plans to abandon the product lines anytime soon.

"Oracle will continue to enhance those applications for the next decade and beyond. We're absolutely committed to do that," he said to applause. "We can afford to not only maintain the software you're running today, but also build the software you may want to move to tomorrow."

Ellison did not provide details regarding licensing and pricing models, including whether Oracle will sell the new applications via subscription, as is the norm with SaaS.

But Oracle is nonetheless ensuring the products are ready for SaaS, including by developing monitoring tools that will track their performance, Ellison said.

While SaaS vendors provide users with service-level agreement guarantees, "there aren't very good tools for figuring out whether you're actually getting the service levels you're paying for," he said. Oracle's tools will enable it to "not only contractually commit but prove we're delivering the service levels."

Fusion Applications are based on a SOA (service oriented architecture) provided by Oracle's Fusion Middleware stack, Ellison said.

This gives Oracle "a huge advantage" because the SOA model will allow users easily to tie together "the Fusion generation and all the stuff you have deployed today," Ellison said.

"We don't think all customers are going to replace what they have today with Fusion," he added. "We think they will augment what they have with some Fusion. Fusion is designed to be delivered that way. ... We have replacement applications and then we have net-new applications."

The initial suite will include modules for financial management, human capital management, sales and marketing, supply chain management, project management, procurement management and GRC (governance, risk and compliance), but other key areas, such as manufacturing, will come later.

Ellison stressed the benefits of the modular approach. "You assemble the components in the order you want to use them, in the order that makes sense for your industry," he said.

Oracle has worked "very, very closely" with customers to design and test Fusion Applications, work that has resulted in a superior user interface, Ellison said.

Embedded BI is another major focus of the suite. "You can't use the system without using business intelligence," Ellison said.

In a demonstration, a pair of Oracle executives showed how the system alerted one user that a particular shipment had been delayed. The application allowed the user to bring up a dashboard showing which order manager was responsible for the particular transaction, and then begin an instant-messaging conversation with him directly from the tool. In turn, the order manager was able to search for less critical orders and reroute them to fulfill the first one.

"We tell you what you need to know, what you need to do, and we tell you how to do it," Ellison said.

Ellison's presentation proved that "Fusion apps are real," said Ray Wang, a partner with the analyst firm Altimeter Group.

While Oracle "definitely has the capability to deliver this as SaaS, it's really up to them to figure out if they want to enter [that market] large-scale," Wang added. In some product areas, such as talent management, "they can't compete without the SaaS option," he said.

SaaS applications are different from straight application hosting, because they use a "multitenant" architecture wherein customers share a single instance of an application but their data is kept private from other customers. In a presentation Tuesday, on-demand CRM (customer relationship management) vendor and Oracle rival Salesforce.com compared multitenancy to an office building, where individual tenants share the overall infrastructure but customize their office spaces.

Oracle "will definitely" offer a hosted version of Fusion Applications, although it remains to be seen exactly how their SaaS strategy for the software plays out, Wang said.

When Fusion Applications arrive, they will also raise the competitive stakes between Oracle and its main rival, SAP.

But SAP spokesman Saswato Das dismissed Oracle's announcement.

"Basically, our Business Suite 7 is the most comprehensive and flexible suite of applications on the market," Das said. "Oracle has been talking about Fusion for a long time, and our suite is available now. They're playing catch-up."

Meanwhile, the work ahead of companies looking to adopt Fusion Applications sooner rather than later is "not trivial," said Floyd Teter, head of the Oracle Applications Users Group's Fusion Council, which has been educating group members about the upcoming applications release.

One key step customers should take is to catalogue their application customizations and determine which ones could be retired, Teter said. "A lot of us have done a lot of custom things. If you're a long-term Oracle customer, it's easy to lose track."

Fusion Applications will also require some companies to acquire new development skills, Teter said. "A lot of us run a lot of customizations through MOD PL_SQL. That's going to be gone. The skill set now is more Java and specifically [Java Enterprise Edition]. You also better have some knowledge of JavaScript."

In addition, Fusion Applications rely on Oracle's JDeveloper IDE (integrated development environment), rather than other Java development tools like Eclipse.

For many companies, there will be plenty of time to plan, since the first version of Fusion Applications won't include certain functional areas.

The lack of manufacturing has prompted the Jet Propulsion Laboratory at the California Institute of Technology, which uses E-Business Suite, to wait for a future version, said Teter, who is a project manager at the lab. "When I get a full-functionality replacement, we'll look at it. In the meantime, we'll continue to stay current on EBS."

But Teter said the vendor's work on Fusion has produced impressive results, particularly in regards to user experience.

Earlier in his keynote, Ellison turned to Oracle's recently announced Exadata 2 appliance for data warehousing and transaction processing. He claimed the machine widely outperforms and is much less expensive than competing technologies, such as from IBM, calling it "the fastest computer that has ever been built to run data warehousing applications."

"This system will outperform any of the competition," he said.

Exadata 2 uses Sun hardware, while the original machine, announced at last year's OpenWorld show, used Hewlett-Packard iron.

Oracle is in the process of buying Sun Microsystems but the deal is on hold while European officials conduct an antitrust review.

Ellison didn't discuss the acquisition during his keynote, but Sun and its officials have played an active role in this year's OpenWorld conference.

Ellison temporarily ceded the stage to California Gov. Arnold Schwarzenegger, who delivered a joke-peppered talk espousing the value of technology, from biotech to the Hollywood special effects that powered his long career as an action star.

"Think of Conan the Barbarian fighting the giant snake," he said, referring to his role in the 1982 film based on Robert E. Howard's tales of a legendary warrior king. "I never could have done that and look so studly without technology," he said to an eruption of laughter from the crowd.

Schwarzenegger also congratulated Ellison and Sun chairman Scott McNealy on the pending acquisition, stressing the companies' importance to California's economy. "Working together, I know the sky is the limit for you and your employees," he said.

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