Oracle Comes Full Circle in Enterprise

Jim Wagner

Updated · Jan 30, 2004

In his keynote speech at Oracle Appsworld on Wednesday, CEO Larry Ellison talked a lot about data — an appropriate topic given that he leads one of the largest database software providers in the world.

Oracle , however, hasn’t always acted like it in recent years. With the advent of enterprise-spanning business applications, the Redwood Shores, Calif., company invested in customer relationship management (CRM), enterprise resource planning (ERP) and other front-end applications.

The result? The Oracle Database 10g, which holds information for the Oracle E-Business Suite 10g, that runs on the Oracle Application Server 10g, which is managed by the Oracle Enterprise Manager 10g. If there are problems running these services, there’s always the Oracle Services 10g offering.

Oracle has been a big fan of the homogenous business platform, where everything runs smoothly off the Oracle platform, with little or no room for third-party vendors (read: competitors). Ellison’s keynote speech suggested a different tack.

Previously, Oracle has talked a lot about integration with third-party vendors, but hasn’t done much about making its products work in a heterogeneous environment, said Steve Bonadio, a META Group analyst. “I think it’s moved beyond where it was a year ago, which was basic lip service,” Bonadio told

The customer data hub is Oracle’s concession to integration. It compiles data from Oracle, Siebel, SAP, PeopleSoft and other applications, strips it down into XML-friendly form, and deposits it into a repository, essentially a real-time accessible database. From there, applications can extract the information to run effectively, a critical need for front-facing CRM applications.

CRM has failed, Ellison said, mainly because software vendors couldn’t provide companies with software that gave a 360-degree view of a customer — meaning a display of every interaction a customer made with the company network, be it in billing, accounting or customer support.

“What seemed like the Holy Grail has been hampered by data fragmentation and the separation between front-office CRM systems and the back-office ERP applications,” Ellison said.

Steve O’Grady, an analyst at Red Monk, said CRM’s inability to “stick” in the enterprise hasn’t been so much a technology failure as an implementation failure. It’s not like content management, he said, an application that normally doesn’t have entrenched procedures surrounding its use.

“CRM software really affects the way people do business, specifically call centers and sales people,” he said. “Implementer would put into place and say ‘good luck.’ End users didn’t like the processes, revolted and didn’t use the software, thus (CRM) fails.”

With the customer data hub, companies use the CRM implementation they want, not one that comes with a package, and are guaranteed it will access the hub.

In highlighting the benefits of the data hub, Ellison might have swung too far to the opposite end of lip service, some said. Bonadio, who attended Appsworld and listened to Ellison’s speech, said the CEO spent so much time talking about integration with competitor applications, he almost minimized his own software.

But Oracle officials stress that the data hub is an alternative to the Oracle environment, not a replacement. With the data models found in every software package you don’t need the hub if you’re in an all-Oracle environment, said Oracle spokeswoman Karen Tillman. On the flip side, you don’t need any Oracle components to run the hub on a network.

Is this conceding that a homogenous data environment isn’t a selling point for customers? Not at all, Tillman said.

“The (customer data hub) provides another option for customers, we still think that the overall E-Business Suite on the single platform is your best strategy, the best information below its cost,” she said. “But we that know that’s not always going to be case.”

Red Monk’s O’Grady said it would be overstating matters to say Oracle is leaving the application space to refocus on database functionality.

“There will be circumstances where a single platform is preferable,” he said. “But I think what it really is, is a recognition that the de facto situation in many enterprises is their data is very heterogeneous and they have not only multiple vendors but multiple repositories from these vendors spread all over the enterprise. A hub that abstracts out a layer of complexity is really more and more of a necessity for many projects today.”

Oracle is well-positioned to provide such a hub, Bonadio said, with its recent work in customer data modeling, data quality tools and data mapping tools.

“Basically, it’s packaging some things they already had and some new things, and saying, ‘Look, we’re a database company and we know how to manage data, and we think we can do it better than anyone in the customer space,’ ” he said.

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