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back to article Oracle and SAP are Big Software, but for how long?

When Oracle announced disappointing third-quarter results in March 2013, executives at the company were quick to blame poor sales execution for a two per cent decline in new software licences and cloud software subscriptions. It wasn't a symptom, they insisted, of underlying problems with the company’s product portfolio - or …

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There is a big difference between what Larry Ellison says and what he does, he is a founder of Netsuite and still the majority shareholder, so clearly he never thought cloud was idiotic....just less profitable.

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Re: Peter 50

"There is a big difference between what Larry Ellison says and what he does....." Gosh, you're not implying Larry is economic with the truth / lies to customers and shareholders / tries to influence the market with complete male bovine manure statements (delete as you see appropriate), are you? After all, wouldn't that be in conflict with Oracle's own Code of Conduct, as foreworded by Larry himself (http://www.oracle.com/us/corporate/investor-relations/cebc-176732.pdf)?

".....Oracle expects its employees to:

• Act ethically and with integrity in all

business dealings..."

/ROFLMAO!

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FAIL

All well and good.

“My experience with on-premise software was that, every time an upgrade was required, it was an orchestrated, resource-intensive activity. It’s an area I just didn’t want to have to worry about any more,” he added. “As a CFO, I considered total cost - the acquisition cost of a new on-premise system, the ongoing maintenance required, the need to employ IT staff to manage in-house servers - and decided that on-premise just wasn’t viable for us.”

And like all beancounters, he's only looked at the figures from the sales guff. He isn't asking "Does this 3rd party company value my data being available to me as highly as I do?".

It all looks good on paper until the 3rd Party or their systems go titsup and you lose a critical part of your business and have no control on the restoration of service.

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Re: All well and good.

"And like all beancounters, he's only looked at the figures from the sales guff. He isn't asking "Does this 3rd party company value my data being available to me as highly as I do?". It all looks good on paper until the 3rd Party or their systems go titsup and you lose a critical part of your business and have no control on the restoration of service."

I agree to a point re what you say regarding data - especially in terms of data security. But in terms of availability it is still no different to an on-prem solution where your actual datacentre or redundant/dark site might be miles away from your actual office building(s). You would still have your cloud & network supplier under a strict SLA or RTO as you would your internal IT department; the question is - do they play well together, whether separate entities or not.

In terms of "control on the restoration of service" - you can only recover an ERP solution so fast before you hit the wall of post recovery validation and testing to make sure that all PIT/REDO logs have been restored etc - so the real control is making sure that you have a DR plan in place - and I would hope that this is what most companies, running ERP either on-prem or cloud - would have in place regardless.

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Re: All well and good.

"and I would hope that this is what most companies, running ERP either on-prem or cloud - would have in place regardless."

And yet so many do not ...

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Re: All well and good.

But before going belly up the 3rd party will manage to send licensing costs trough the roof.

How many things that were at one point quite cheap are now a luxury ... starting with water ... just because the 3rd party lured you into thinking that watering your garden from the tap would be cheaper than having your well fitted with modern plumbing.

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It is amazing to me...

That this return to the past, where a Data Processing company does all your data processing, and you access and enter the data with remote terminals is the fancy buzword worthy "cloud computing", and that providing the software to do this data processing at the remote data processing facility is "Software as a Service".

Why was it we moved away from this model in the first place.....

In another 20 years am I going to have to hear about the newest hot trend in IT "client centric computing", where some of the DP load is processed at the client site, instead of in the "old school cloud environment"....

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Re: It is amazing to me...

>where a Data Processing company does all your data processing

Lol didn't Ross Perot get rich processing government stuff like Medicare payments in the off hours with other companies business computers (when computing time was dirty cheap) in the 1960s? But still they say you old timers wouldn't understand this new fangled technology.

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A lot more is needed from SaaS offerings

I can see SaaS as very compelling for small and medium size businesses. For large, complex organizations with a lot of IT already in place, there are frequent needs I don't often see mentioned that, so far, limit how useful replacing SaaS would be. For example, where I work, a common thing with on-premise solutions (licensed or home-grown) is that they are integrated with one another. From what I've seen of most SaaS offerings, integrations and customizations are usually extremely limited, if on offer at all.

While integrations like this are sometimes a pain to create and maintain, they usually exist for a reason, reducing duplication of data entry, improving automation, etc. These are real needs that still need to be met in big organizations, but most SaaS offerings seem to exist on a pedestal inside a walled garden, making using them for this awfully challenging. Yet it seems overkill to me in a world where SaaS exists that having an on-premise solution is the only way to address these kinds of needs.

I think this is a problem with product maturity that will eventually need to be met. I expect some future wave of cloud marketing to make a big deal of how various SaaS products expose APIs (possible for added cost) that allow this sort of integration with other products - even SaaS products from other providers. At least, I hope to see that some day.

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The big firms are also disliked by many of their customers

Anyone who has been burned by new releases of Oracle software not supporting all the features of previous versions or by bugs that take ages to fix (if they ever are) or by prices that are excessive is unlikely to be a fan of Oracle. When a reasonably priced alternative becomes available then they are likely to want to ditch Oracle as soon as practical. (SAP probably has the same problems but I never used SAP but I was an Oracle DBA and systems admin for years.)

For a new company, there is probably NO reason to use Oracle or SAP. Below the multithousand employee level, much cheaper products from other companies are likely to be adequate and with far lower staff overhead requirements. (For an example of their high prices - the list price for Oracle standard edition database running on a six core Xeon CPU is $52500 to buy and $11550 per year in maintenance and this is only for the database - no applications. )

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Anonymous Coward

Re: The big firms are also disliked by many of their customers

"Anyone who has been burned by new releases of Oracle software not supporting all the features of previous versions or by bugs that take ages to fix (if they ever are) or by prices that are excessive is unlikely to be a fan of Oracle"

Strikes me that this statement describes the whole Oracle user base.

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Anonymous Coward

Re: The big firms are also disliked by many of their customers

If all 6 cores are on the same socket then the list price for Standard Edition is $8,750. After discount more like $2,500.

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Happy

Doesn't he look.....

....like Dave Gorman!

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SAP - the sooner RIP the better

go speak to the engineers techs & offeice people who have to use this benighted product.

it appears to have been designed by a bunch of monkeys; no signs of ANY user validation (oh sorry the CEO & CFO probably think their bit is wonderful).

not only is there no sign of user validation there is no sign of users eve being ASKED how they handle their data; in what order it is input; in what format.

read this http://xkcd.com/1205

now work out if 1000 employs spend an extra 5 minutes a day fighting SAP it will take forever for the ease of which some senior flunky can pull out a report that only the accountants care about to make any real savings at all.

central data ? don't have a laugh; it just means no one is allowed to remove the thousands of duplicates casued when SAP sucked in 5 diferent unrelated tools. Central pool of crud; the exact oposite of what any Enterprise system should be offering.

yup I hate SAP - I have seen it in use in many factories and have to work with it again in current employ and it remains one of the most user unfriendly pieces of garbage in the universe; it even makes windows look good. Extreme experience - visit factory - 'we've just had SAP; we'll have integrated work orders next week ....

5 YEARS later; work orders still produced by hand as SAP was just too cumbersome to use AND STILL NO ONE HAD ASKED THEUSERS WHAT THEY NEEDED.

/rant over

GO ASK THE REAL USERS ABOUT WHAT A LOAD OF CROCK SAP IS /rant really over

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Re: SAP - the sooner RIP the better

beat me to it. Yes indeed sir. A wit dubbed this type of management software "Corporate arterial sclerosis". ElReg article a week ago also pointed out how these things freeze the organisation at PIT, so change becomes very difficult. Secondly, in no workplace, big, small, public or private have I ever seen the coalface staff asked what they need to do their jobs better unless I pushed the entire project myself or my part of it. Each time the results were very cost effective. Doubled throughput and increased useful reporting. Even uncovered a serious bug in Oracle of the time. The untrained end users did something the developers never thought of. IMNSO, Yank firms are especially bad for making life harder for customer facing staff. PHBs seem to think asking the peasants is demeaning.

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Re: SAP - the sooner RIP the better

Just to back you up, you are absolutely correct! As having been one those coal faced customer facing staff in a Yank firm. That was one of the most stressful disasters I've ever experienced in my entire life. I witnessed other poor sods like myself say the same thing. Our task to assist/serve the customers needs was sometimes impossible.

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Re: SAP - the sooner RIP the better

A company that we deal with used to turn around our orders within 5 working days. Now it takes them a minimum of 6 weeks. When we rang to ask why the big delays now, their reply was "We got SAP installed..."

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Anonymous Coward

I've worked on an Oracle system. I won't say product, because the system actually had something between 3 and 400 products in there, depending on who did the audit. I wish I was kidding.

I was actually a third party support, basically doing Oracle's job of supporting everything for our client. There main problem is they expect to sale you a bowl of tangled spagetty and pass it as a fine engin capable of doing 0-60 in less then a second. And then they give you the ability to add your own sauce to the mess and refuse to help when things break. I am sure it as improved since I worked on it, but I somehow doupt it.

The SaaS have to make sure it runs really stable for everyone and that it's as efficient as possible, because that means it'll cost them less in hardware to make it run, or less cloud cost, whatever.

So while Oracle's bread and butter as always been to make a bloated heavy mess, charge you a fortune for it, then another fortune for lousy support.

If you want to make money doing SaaS, you want it light, stable and hard to break. That tends to mean less cost for clients that rarely have to call support and are then relatively easy to help. But it's harder to justify a 600 000$ a quarter for.

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WTF?

It's all about the lock-in stupid.

You want to avoid being locked into SAP/Oracle while paying through the nose for maintenance, so instead you choose SaaS, thereby giving the vendor more control over your daily operations for a subscription.

Either way cash flows continually and the cost of you migrating to another system determines the rate of cashflow. Except with SaaS of course you have little practical guarantee of being able to recover all your data when you choose to. I am confident that after a few of years of market consolidation you will find that they can make prices rises that you can't refuse.

Here's an alternative that enterprises have already some success with:

Wave a wad of readies at a smaller vendor (buy shares, whatever) to make their system work for you the way you want it, and as long as you ensure that your changes are useful to other customers you could share some of the dev and training costs with other customers instead of paying consultants big money to do site-specific hacks on some enterprise level crapware.

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Another reason why SAP and OpenERP don't fare as well in the ERP world as they once did...

Dare I mention it: open source?

Open Source ERP systems have come of age and are used extensively (even here in the UK).

SME are selecting open source ERP systems, but oddly no mention here (well not really, because when you know how Gartner and others work).

They are not free as in free beer, but have a far lower TCO then the other proprietary be it on-site or SaaS/ Cloud offerings and also have the feature set a SME manufacturing business in the UK needs.

OpenERP is such an example.

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oracle in the clouds

The latest Oracle magazine has an interesting article where they interview a real Cloud Customer

http://www.oracle.com/technetwork/issue-archive/2013/13-may/o33ironman-1935564.html

...or perhaps not.

I think it says quite a lot about Oracle cloud that they can only find a fictional company to interview!

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Not Legacy vs Cloud its known costs versus unknown costs (that they think they can ignore)

This is not a technology debate - just a product pricing debate.

This is all a big smokescreen - yes the big software houses have got afat and lazy and are gorging themselves at the trough of licence fees but thats not the main driver to the the cloud. Its the fact that the CFO can see the Total Cost Ownership of operating big software on site, but since he doesnt see the TCO of operating cloud software it looks A LOT cheaper. In reality common sense tells us that if you have a business need of complexity X it doesnt matter where it runs.

What I would like to see is estimate of costs of cloud based outages, data leakage, End User App creation as the cloud isnt as mature/flexible etc etc.

My gut feel is that once you take out Oracles & SAP's overly large margins the TCO is relatively even.

As others have said this is just one point in a continuing cycle between on site and remote hosted processing.

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SAP/oracle Don't blame the software

Blame the implementation partner/project management team

For every failed project there are 100s where putting in SAP/Oracle has been a success and has resulted in inefficiencies.

If they were truly crap enterprises would not by them.

Far too often certain individuals (mainly finance and bean counters), control the implementations with only their requirements being important without looking at the true business needs.

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