Oracle Goes Vertical

Oracle  is touting a new strategy designed to streamline the dizzying array of company products under its roof. Company president Charles Phillips also updated five key applications.

Phillips announced a new version of Oracle’s E-Business Suite 12 featuring business decision management systems. The new version increases greater centralization, control and maintains banking and tax rules.

PeopleSoft Enterprise 9.0, Oracle’s human resources management software, now includes PeopleSoft Enterprise Human Capital Management 9.0.

Siebel CRM 8.0, Oracle’s customer relations management package, offers a new task-based user interface, enterprise search and embedded intelligence.

Oracle also updated its JD Edwards Enterprise 8.12 and World A9.1 applications.

The enterprise suite, introduced in 2006, includes a new Operational Sourcing product, plus modules for the food and beverage industry. JD Edwards World, which not been updated in 10 years, offers compliance support, technology improvements and global capabilities, according to the company.

Phillips said the releases are proof that Oracle is delivering on its strategy to protect and extend customers’ current investments in its industry suites.

Realizing some customers may be baffled over how the software giant will fuse its acquisitions, that include Siebel, JD Edwards and PeopleSoft, Oracle said it would create four business units covering retail, communications, banking and utilities.

Units will be led by former executives of companies Oracle purchased, Phillips said during a briefing. The new strategy enables Oracle to better decide future acquisitions.

Merrill Lynch, in a research note, praised the approach. “Oracle’s vertical strategy serves to differentiate it from SAP. Following the new strategy could “double or even triple its apps revenue,” the Merrill note said. Focusing on specific industries could inspire more customers to upgrade their legacy applications.

Oracle’s Fusion middleware will serve as the glue integrating the applications. Middleware is the “foundation of how we’ll build applications in the future,” Phillips told the audience.

Fusion is Oracle’s commitment to PeopleSoft and JD Edwards customers and developers concerned whether the software company would continue to support their applications. Oracle’s answer to SAP’s Service Oriented Architecture (SOA), which hopes to improve interoperability between applications, Fusion is based on technologies such as Business Process Execution Language (BPEL.)

Fusion also will integrate Oracle and third-party applications. The first Fusion applications will appear in 2008, Phillips told reporters.

Not all Oracle customers will embrace Fusion, instead remaining with separate software packages. Foreseeing the potential hesitancy, the software company introduced Oracle on Demand. The service lets Oracle host the Fusion-integrated applications for customers. Up to 50,000 customers use the new service, Phillips said.

Oracle also outlined lifetime support for applications.

Philips’ comments reflected the trends in the enterprise software industry. “We are giving our customers the choice as to when they upgrade without having to re-license their application.”

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