Oracle's Fusion Applications revenues have "hit pockets of weakness in the past two years" and the company is "at a crossroads" with its Fusion marketing and sales drive, says analyst Forrester.
Forrester questioned 140 Oracle clients and found that two-thirds (65 percent) of them had no plans to implement Oracle Fusion Applications, and another quarter (24 percent) did not know if they would go down the Fusion path.
Forrester said clients reported "lack of clarity about Oracle's app strategy and Fusion's immaturity" as the biggest barriers.
In its report, "Oracle's Dilemma: Applications Unlimited Versus Oracle Fusion Applications", Forrester said, "Oracle will need to increase client interest in Fusion or de-emphasise it as another app in its Applications Unlimited offering."The analyst house predicted Oracle would try and step up its drive round Fusion. It has, spent many years much of its marketing budget trying to sell apps that have been created from multi-billion dollar acquisitions.
And as Forrester says in its report, "The current middle path of talking about Fusion while providing no disincentives against clients staying on existing apps will lead to mediocre growth."
Forrester analyst Bill Band said, "Oracle faces a strategic dilemma, and how it responds to this dilemma ill present the CIOs at its clients with some tough choices. Oracle Fusion Applications have had low levels of adoption by existing Oracle customers, in part, because Oracle's Applications Unlimited policy has provided them with little incentive to migrate."
Band said Oracle's organic revenue growth has "slowed over the past year or so" as its existing products have aged, and that it has needed acquisitions of leading software-as-a-service (SaaS) vendors like RightNow Technologies and Taleo to bolster its app revenues.
Band added, "Oracle has not wavered in its commitment to continue to support existing applications customers indefinitely. However the company is clearly now more aggressive in promoting Oracle Fusion Applications and cloud deployment models, including private cloud and SaaS, to its customers."