As any experienced observer of our industry knows, the weaker the message a software company has on offer, the higher in the corporate hierarchy it has to go to deliver it. Oracle did not fail the tradition as a posse of vice-presidential bigwigs led by the head of its HCM development organization, descended a couple of weeks ago upon the City of Light (the home of yours truly) as part of their Fusion global roadshow.
The stakes are high. As soon as Oracle finalized its acquisition of PeopleSoft in 2005, it announced it was starting work on the successor product. Although I was among many chagrined by the demise of the jewel in our industry, I couldn't really blame Oracle: from a purely business perspective it didn't make sense to keep having several parallel products. Four years later, in 2009, there was still no Fusion on the horizon but Larry Ellison, rarely detracted by reality, famously announced that Fusion was going to be the SuccessFactors and Workday killer. More than two years later (almost six years after first announced) and with scores of Oracle and PeopleSoft customers defecting to SuccessFactors and Workday, where is Fusion?
When it was demoed at the HR Technology Conference in Chicago a year ago (see my post on it) release was announced for early 2011. Then it was pushed to the second quarter of 2011 and only in the summer was "something" finally made available.
First comment: the product is available for download, putting to rest any notion that it is SaaS-based. As anybody with a modicum of interest and knowledge in the matter knows, if you can install it on your server then it is NOT SaaS. Call it a hosted solution and the vendor an ASP or whatever alphabet soup you feel comfortable with, but SaaS it sure ain't. Also, the price list for Fusion is only available for the on-premise implementation, not the "cloud" variant which Oracle claims it has: another proof of how fuzzy and half-baked this mock-SaaS offering is.
Second, if I used "something" to describe the scope of what is available, it is not to belittle the hard work that went into it (and I know that many people did work hard on it), but it is an honest description of the functionality which is mainly based on compensation, one component of talent management, itself just one part of any overall HCM offering. Where is recruiting? (Wouldn't Fusion have been a great opportunity for Oracle to fix the double failure of its Oracle iRecruit and PeopleSoft eRecruit products?) And Learning/development? and Succession planning?
Who in their right mind would believe for a second that SuccessFactor has anything to fear from a product with such limitations? And as for Workday, it started work on their ground-breaking product at the same time as Fusion with $100 mn in seed money (Oracle makes profits in the billions), and a few dozen employees (Oracle has a cast of thousands working on Fusion - and, as few people know, this was supplemented by resources from Indian IT giant Infosys). As of today, Workday has not only delivered an entirely new HR system of record, two payrolls, strong talent functionality (even if missing some key parts), but also a financial management system. Where are Fusion's country localizations? The HR Admin, Payroll, Benefits modules may look good in demos (but what product doesn't?) but no company has selected them (let alone is running them) which is very suspicious.
To call Fusion half-baked would be very, very charitable. Rarely, if ever, in the history of software making have so many taken so long to produce so little. In less the time it took Oracle to present us with a Fusion embryo, Alexander the Great conquered the world. Now, that's perspective.
At last month's HR Technology Conference in Las Vegas, I ran into a senior Europe-based Fusion executive whom I had known for over a decade. As those who attended the event know, the South Pacific section of the conference grounds has many nooks and crannies. So, cornering my old Fusion pal into one of them, I managed to extract a confession from him.
"How many European Fusion early adopters do you have?" I asked.
"Larry will announce them tomorrow at Open World," came the less-than-assured reply.
"Come on, don't give me that marketing crap. We go back a long time. If anybody should know, it's you. For God's sake, you're based out of Europe. So, spit it out." For those who know me, I am nothing if not tenacious. All I got, though, was an embarrassed smile.Of course, the next day at Oracle's annual jamboree Larry in an uncharacteristically lackluster performance was long on vague customer numbers, but short on actual names, and none of them from Europe.
The Paris event, a few weeks later, didn't bring any new names either. Software vendors are rarely shy about trumpeting their customer wins, especially when attached to new products to which they lend the credibility needed to succeed on the market. Sometime they even overdo it - in Europe, think of SuccessFactors and Siemens, or Workday and Aviva, to use the two competitors Larry Ellison had singled out. If Oracle, which nobody by any stretch of the imagination would call a shy, timid or bashful company, cannot produce any European customer, then you and I can only come to a single conclusion: there isn't any.
I can't say this came as a surprise to me. The dozens of Oracle and PeopleSoft customers I have asked in Europe are all unanimous: we will not touch Fusion with a ten-foot pole. Can you really blame them? Functionality that is so limited that it verges on the absurd, the less-than-glorious development and customer-support track record, the realization that Fusion apps, and HCM within them, are just a tiny part of Oracle's portfolio and, even more seriously, the doubts about the strategy behind it.
As I said earlier, the strategy to rationalize all of Oracle's acquisitions into one single product made business sense. But does this strategy devised in the first half of the past decade make sense now when much nimbler vendors whose products have deeper functionality are churning out new releases on a quarterly basis and five years on we are still waiting for Fusion 1.0? Does buying Sun to provide hardware and software together (as Oracle's great slogan goes) make sense when companies are increasingly going to be renting rather than buying their software needs and will therefore no longer require any servers within their corporate walls?
Fusion, and Oracle, look increasingly like today's solution to yesterday's problems. The market has moved on but the big ocean-liner is proving hard to turn around. Actually, considering that Fusion is barely here, it would be more accurate to say that Oracle and Fusion represent tomorrow's solution to yesterday's problems.
A major French bank, BNP Paribas (160,000 employees worldwide), after pulling the plug on PeopleSoft said, "Fusion? Thanks, but no, thanks." Then, adding insult to injury, BNP went to their pre-PeopleSoft vendor, HR Access. It is worrying for Oracle to have its next-generation product rejected in favor of one based on older technology. (With SAP also being used.)
And France is not the only European country where Oracle customers are dumping Oracle, rejecting Fusion and moving to Workday. In a recent interview in ComputerWeekly, the head of HR of UK-based insurance company Aviva, explained why he eliminated Oracle HR and selected Workday: "[with Oracle] when the CEO asked me how many staff we had in Europe, I could not tell him. It took weeks to find out. Now [with Workday] I can do that in 30 minutes." He then goes on to explain why he did not choose Fusion: "The technology was not there, Fusion was not ready, and its software-as-a-service model was not a true SaaS model." He also echoed a common complaint of Oracle customers that "communicating with Oracle was very difficult."
In several forums, I predicted that Fusion would not make any significant traction before 2015. So far, I have seen nothing to amend my analysis. And as for Mr. Ellison's claim of burying Workday or SuccessFactors, even after taking into account the typical hyperbole-prone statements so much favored by our industry, it is simply preposterous and betrays the fear that the reverse may well happen.
Great article, but is it really true Fusion doesn't include payroll, benefits and localisations?
ReplyDeleteHere's the associated LinkedIn group discussion:
ReplyDeletehttp://linkd.in/rroqd1
A week ago I published my blog post and initiated this discussion. I was overwhelmed with its success. In a couple of days the post shot to the #2 spot in the Google ranking of my most popular posts, and it is now the most read of my posts with over 2,200 views in just one week. To say I was stunned by the figures would be an understatement.
ReplyDeleteSince my 600 contacts in the HR and HRIS community automatically got an email notification that it was available, + this group which has over 6,500 members + my 250 LinkedIn contacts, a total of almost 7,500 was the potential readership. At over 2,000 views that is a hit of almost 30% which is quite impressive and is evidence of the strong interest the market has in Fusion.
Question: if there is so much interest on the part of HR/ IT decision-makers how come more of them don’t make the jump and buy it? My analysis is that they are waiting for the scope to expand, the first release to stabilize and see the experience of early adopters before making a decision.
As can be expected, my email and LinkedIn inboxes were swamped with messages from information-seeking HR leaders. If you read this, please accept my apologies if I don’t get back to you quickly but replying individually to over 120 messages (as of today) is time-consuming. I shall try, though, to get through most of them by week’s end or at the latest early next week. Again, thanks for your interest.
With this post, I also premiered my first poll which asked readers “When, if ever, do you think we will see significant Fusion uptake?” The number who voted, 76, was low considering the number of viewers but that is understandable: since most readers read the post looking for information and opinion, they do not necessarily have an opinion of theirs, or at least not yet. So it makes sense to have only a fraction of them participating in the poll. I was a bit surprised by the results, though, especially as I seemed to be one of the few with the most Oracle-friendly views. Only 16% shared my view that Fusion HCM will start getting traction in 2015 (one can assume that those who were even more positive, that is who expect Fusion to make big waves BEFORE 2015, would choose this date as the closest to theirs.) The next two years was the bet of 30% while a very skeptical 52% of voters felt that Fusion will never take off. I may be wrong, but that strikes me as very unlikely: Oracle has invested too much on Fusion to just let it sink.
Of course, I have no way of knowing who took part in the poll. Maybe most came from the ranks of SAP and Workday which would explain the strong negative vote. But then you can expect many pro-Oracle votes to redress the imbalance so I would say that the vote is an accurate reflection of the way the market is viewing Fusion. Next year I will have a repeat exercize to gauge evolving market sentiment .
@ doolittle: As I said, Fusion Payroll, Benefits, HR Admin may look good in demos but since no one has so far adopted them, let alone is live on them, I will be very cautious in considering them as available
ReplyDeletefyi, Oracle is currently trying to sell us Fusion HCM (in a currently
ReplyDeleteactive RFP) and Oracle execs claimed to have 50 Fusion early adopters,
but when it came to actual references, Oracle only gave us one (we
requested three.) That reference was running comp only.
Interesting, if not surprising, is that on-premise is not available to
Early Adopters. Presumably they rightly surmise that a customer
attempting to install and manage the technology stack would be ugly at
this early stage.
Keep in mind Workday is SaaS, and for most enterprises, that model just doesn't work. Most of us have data protection requirements that preclude a cloud based data repository. SaaS may work well for certain segments of the market, and I really wish Dave well in his endeavor. But, it won't replace locally owned software assets in most enterprises.
ReplyDeleteDear Anonymous (from Jan. 23),
ReplyDeleteWith all due respect, I beg to differ regarding the SaaS model not being appropriate for large enterprises. Aviva, Flextronics and several other Workday customers have customers in their tens or hundreds of thousands of employees. Renault, Siemens use SuccessFactors for a similar size of employees. So there is obviously no inherent reason why the SaaS model is not fit for large enterprises.
Now to the data-protection issue. What makes you say that small to mid-sized companies don't have as stringent data-protection requirements? And if they can get the same protection in the cloud as within the wall of their companies, then there is really no issue.
Companies have been hosting their data for a long time and so far there has been no issue with data protection. So, you can't use that argument against the SaaS model.
The only reason a company may want to keep its IT system in house vs in the cloud, is if it has some unique requirements which mean that customization is necessary. As you know, once you go SaaS you forgo that option (of course many customization requirements are what I would call "false" requirements). But assuming that a company has done a good analysis of its requirements and found that some crucial needs can only be met by strong customization, then only an on-premise system makes sense.
Otherwise, there is no reason why you would want to buy your software rather than rent it, unless of course the functionality is better with the on-premise system. But then the issue is just feature/function comparison, regardless of delivery model.
"As anybody with a modicum of interest and knowledge in the matter knows, if you can install it on your server then it is NOT SaaS."
ReplyDeleteOracle markets Fusion HCM in 3 flavors: on premise, hosted, and SaaS.
Are you saying that just because they offer the option of an on-premise install that it negates the validity of their (seemingly accurate) SaaS version?
I don't see these as mutually exclusive but would like to know your thoughts.
Dear Geoff,
DeleteYes, you've understood me perfectly. To be pure SaaS requires, among other things, a single codeline, a single upgrade/migration methodology (regular updates), all customers on the same release. This cannot be achieved if you have some customers on one instance and others on different ones.
So, to say as you do that "Oracle markets Fusion HCM in 3 flavors: on premise, hosted, and SaaS" is false, at least for the last one. Oracle does NOT have ANY SaaS offering. To state that much is at best misleading, at worse dishonest for customers.
Now, there is nothing inherently wrong about being on-premise or hosted: companies have been using this model for a long time, and many will still be doing it in the foreseeable future. So, call it ON-PREMISE and HOSTED because that is what it is, but please don't call it SAAS because that refers to a radically new way of building, selling, deploying and upgrading software.
Therefore, and contrary to your assertion, SaaS and the other two models ARE mutually exclusive .
This is really just a bunch of cloud washing on the part of Oracle.
DeleteDear Ahmed, thank you very much for the article. Currently, I am evaluating Fusion and Workday for a leading investment bank for its HRSS operations. Would you like to reconsider your views presented in November, 2011? Have you published similar articles recently? Thank you.
ReplyDeleteDear Anonymous,
DeleteI assist a lot of clients doing exactly this type of exercize. The best way to provide you with up-to-date and meaningful information is to contact me directly: contact@AhmedLimam.com.