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Oracle tempts users to upgrade with services

Oracle tempts users to upgrade with services

Oracle is set to announce packaged service offerings designed to make it easier for companies to use its E-Business Suite 11i, part of an ongoing effort to encourage more of its customers to upgrade to the software.

The company will also announce a program from Hewlett-Packard that includes discounts on hardware and tools, along with equipment trade-ins, for customers upgrading from version 10.7 of the suite. Oracle has said that it will stop supporting the estimated 2,300 customers still using version 10.7 in June.

Called Business Flow Accelerators, the packaged offerings include software, implementation services, training and ongoing maintenance for deploying applications that can automate certain business processes.

Oracle vice president for E-Business Suite marketing, Fred Studer, said they would be offered at a fixed price depending on the size of the job and the number of flows a customer implements.

For example, an offering called Citizen Contact to Resolution includes software and services for setting up a system that lets federal government agencies process call centre queries from the public. Others include a project management system called Project to Closeout for the higher education market, and Accounting to Financial Reports for heath care providers.

The offerings aren't exactly new - they expand on a similar effort launched two years ago called Oracle Fast Forward. The difference is that Oracle's applications have matured and can be customised more easily, and the service offerings have been tailored for more specific business processes, Studer said.

"Fast Forward flows were more focused on general domains, like HR or manufacturing," he said. "These are specific to certain processes where customers see a lot of opportunity in automation. And our ability to fine tune has come a long way."

The offerings would not cater to all the unique needs of enterprises, and Oracle could not predict how business processes woukd evolve over time, Studer said But the applications could be modified as needs change.

Oracle launched E-Business Suite 11i in May 2000, pitching it as a product with all the applications an enterprise needs to run its business, covering areas like supply chain management, sales and marketing, finance and human resources. By standardising on a single suite, Oracle argued, businesses could tie applications together more easily and reduce the cost of supporting multiple software platforms.

Things didn't quite go according to plan. Early customers reported finding numerous bugs in the software, making it hard to install, upgrade to or customise. Two-and-a-half-years later, only about half of Oracle's 13,000 applications customers have gone live with the software.

Research director with Forrester Research, Laurie Orlov, said that Oracle had "pretty much overcome its bug problems with 11i." But the company still wasn't selling as much of the software as it would like.

About 5200 of Oracle's applications customers have gone "live" with E-Business Suite 11i, while a further 1600 have started to make the switch, according to Studer. About 3500 customers are on some other version of 11, while 2300 customers are on 10.7.

That less than half of Oracle's customers have gone live on E-Business Suite 11i was "not the most admirable track record," Orlov said.

Another analyst disagreed.

"That's anything from good to average," said Dennis Byron, vice-president for enterprise applications research at IDC. "They had about 1000 upgrades in the first year. Presumably their customers are talking to one another, so both metrics tell me they have some fairly happy customers."

Orlov offered a handful of suggestions as to why more Oracle customers haven't upgraded. Spending on enterprise applications was down in general, and competitors like PeopleSoft and SAP had been doing well in areas such as CRM and supply chain management, she said. Oracle also hadn't done a great job forging partnerships with consulting firms, she said, and the company faced the challenge of trying to develop and market multiple products simultaneously.

Users of 10.7 will have little choice but to upgrade if Oracle goes through with its plan to cut support for that version in June, but Orlov said that may not happen.

"At forthcoming product shows their customers will scream and scream at them and they'll back off: that's my prediction. Oracle doesn't want to lose the maintenance revenue," she said.


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