was browsing this afternoon through one of the free magazines
that pile up on my desk while I'm away, and came across an
interesting article on Oracle that I thought worth sharing. It's
in this month's
Information Age and entitled
"Oracle's Victory March", and an online version is available
on the infoconomy.com website.
It's written by a journalist called
Kenny Maciver and
it's a pretty good summary of where Oracle are now, how it got
to where it is and where it's going, post the PeopleSoft
merger. You can tell it's going to be a good article when it
starts off like this:
"It has been a painful journey for Oracle's applications
software business to January 2005. The uncorking of champagne
that marked the completion of its $10.3 billion, 19-month
hostile takeover of application rival PeopleSoft on 7 January
would have seemed unthinkable around the year 2000 when its
management team was split by internal warfare, and the
premature release of the atrociously 'buggy' E-Business Suite
11i almost killed its ambitions in applications stone dead.
If a single meeting changed that potential outcome, it
took place on an afternoon in 1998 when Oracle founder and CEO
Larry Ellison reluctantly agreed to pick up the applications
Under intense pressure from Ray Lane, the company
president at the time, to somehow "turn a bunch of 'sucky'
applications into something that the Oracle sales teams could
actually sell", he demanded Ellison sack the loyal but
uncharismatic head of applications development, Ron Wohl, and
appoint an outsider to lead the division - a division that was
turning into the ugly sister of the company's hugely
successful database business.
Surprisingly, even to Lane, Ellison made a watershed
commitment. As he later recounted to Matthew Symonds, author
of the Ellison biography, Softwar: "I [told Ray], 'Okay, I'll
be Mr Applications. I don't want to do it... I really don't.'
Order management, tax tables, accounting - are you kidding me?
I'm working on parallel server [database technology]. I didn't
want to go from computer science to accounting. I thought that
understanding and automating all these business processes
would be dull and duller. It just wasn't a book I wanted to
What happened next goes directly to Ellison character -
and stands as a pointer to how the PeopleSoft saga might turn
I was impressed with the use of
Softwar as background material; I've
before that if you're looking to get a good overview of how
Oracle came to be the company it currently is, including all the
internal politics and their "aggressive" approach to marketing
and development, this is the book to read.
The article goes on to talk about the first release of the
"With the E-Business Suite it first released in May
2000, Oracle had rebuilt the applications code almost from the
ground up to create, under Ellison's vision, an
Internet-centric, integrated set of core business
applications. Almost 40% of the modules were new and they all
shared a single, unified data model. Unfortunately, Ellison,
renowned since the early days of Oracle as adhering to the
product release principle of, 'If it compiles, ship it', did
The first version of the Oracle E-Business Suite 11i contained
over 5,000 documented bugs. Oracle itself did not install the
product until the beginning of 2001 and even then it found
that the mission-critical order management system was so
incomplete that the company was unable to place a single order
for a fortnight. Others in the same boat had different
problems. International courier DHL found it was unable to
complete transactions in euros, putting its planned roll out
of applications to a dozen European divisions back by several
With the recently completed PeopleSoft takeover, the author
then looks at Oracle's history of previous takeovers, including
one that we'll all be familiar with:
"In the early 1990s, a new type of database emerged that
(at least in some areas of business intelligence) threatened
the hegemony of relational database products. These online
analytical processing (OLAP) products are the foundation of
most complex data analysis today, but back then only one
company was cleaning up with its pioneering technology - Arbor
Software (later Hyperion Solutions). To compete in what it
regarded as its backyard Oracle acquired the Express product
line from research house IRI. But within a few years it had
let Express die on the vine and in the process lost the
initiative - and a top position - in business intelligence."
I'd probably disagree slightly with this - sure the marketing
of Express (and the follow-up, Oracle OLAP) has been a series of
largely self-inflicted disasters, but it's still the best OLAP
server technology and is finally now coming back into relevance
with the 10g Business Intelligence Suite. Still, compared to
what industry commentators expected Oracle to do with Express
compared to how it turned out, I'm sure this is largely a fair
So, given Oracle's history of takeovers, none of which are
anything like the scale of the PeopleSoft merger, and the
previous "release first, sort the bugs out after" approach to
development, does the author think things are heading for
disaster? Well no, actually, because he thinks Oracle has now
"Of course, Oracle is not the same company it was when
these previous sea changes took place. It is much more mature.
Its E-Business Suite now consists of a stable, broad
applications portfolio, built on a common data model. The
company has established internal processes that now make it
less volatile and more responsive to customer issues; its
financials (thanks to the lucrative franchise built by its
database product) are in good shape ...
... In a statement in early
January, Oracle said that its aim was for the PeopleSoft
engineers to complete the development of PeopleSoft version
8.9 (in 2005) and then push towards the last upgrade, version
9.0 (in 2006). The last JDE EnterpriseOne release will be 8.12
(due in 2006), with JDEWorld and Enterprise XE on support and
"enhancements" only. The fusion of key PeopleSoft
functionality and the Oracle applications is due in 2007-8.
While it is laying off 45% of PeopleSoft's staff of 11,225,
Oracle has offered jobs to 90% of its development and support
engineers. But customers, intent on protecting their
investments in PeopleSoft applications, will want to know how
many sign up. "
Although it's certainly not going to be plain sailing:
"Whether PeopleSoft and JDE's 11,000 customers will
eventually migrate to Oracle depends on how that early
experience goes. But Oracle is counting on a large proportion
eventually making the switch. If not, its revenue picture is
certainly not going to turn in the right direction ...
In the coming weeks, as Oracle spells out
plans for its organisational structure, products and
marketing, PeopleSoft customers must now hope that there is a
silver lining to the predicament they find themselves in.
Oracle may have won the fight for their business - now it must
show it deserves it."
Anyway, as I said at the start this is an
excellent, well written and well researched article that's a
great heads-up on what challenges Oracle are likely to face in
Take a look if you've got a spare 10 minutes, and the rest
Infoconomy site looks worth a look as well. Just shows it
pays to look through the freebie magazines once in a while.