When it comes to enterprise applications, there is a growing trend toward providing applications in the cloud. The financial community loves this, because a software vendor’s revenue stream becomes much more predictable. But there are advantages for users as well.
At the Oracle Value Chain Summit on Tuesday, January 27, Mark Hurd, the CEO of Oracle, made some bold predictions about applications hosted in the “Cloud.” He said that Cloud applications will account for 50 to 60 percent of the total enterprise application market within 5 to 6 years because of advantages related to speed of development of new functionality, easier implementations and much, much easier upgrades.
Steve Miranda, the Executive VP of Development at Oracle, said that because of these advantages, “It is not a question of ‘if,’ it is a question of ‘when,’ all new applications (from all enterprise vendors) will be delivered in the Cloud.”
The Oracle Value Chain Summit, as the name would suggest, was focused on supply chain applications. There were over 2,500 attendees this year.
Miranda made the point that to fully leverage all the advantages inherent in the Cloud, applications need to be rebuilt from scratch rather than just hosting existing applications. In particular, the Oracle applications were rebuilt to: first of all, support frequent updates, through the use of more metadata; and secondly, to reduce the need for customization by building out Platform as a Service (PaaS) capabilities that allow extensions to the SaaS-based Cloud applications to be built and thus allow for protected upgrades.
Because of the need to rewrite their Cloud applications from scratch, Oracle has been releasing new supply chain functionality on an ongoing basis. In Release 8 they added functionality surrounding “procure-to-pay.” In Release 9, the focus was product design. Release 10 is planned for quote to cash functionality. And Release 11 will support manufacturing planning and order management.
Meanwhile, Oracle Transportation Management and Oracle Global Trade Management are available in public or private Clouds. The Demantra solutions – Demand Management, Predictive Trade Planning and Optimization, and Real-time Sales and Operations Planning – are also Cloud ready.
ARC has long written about the advantages of public Cloud solutions for applications that at their core require extensive collaborative process flows with trading partners – like TMS does with carriers – or require frequent content updates – like global trade management does because of constant changes in trade regulations. Our research shows that public Cloud TMS solutions are generally implemented more quickly than on premise solutions.
The conference provided some evidence that Oracle’s private Cloud demand management applications could be implemented faster as well. I saw a presentation, and talked to one user, who had implemented demand management based on this type of architecture. I considered these two implementations to be about average in length, although the executive I talked to in person was convinced that her company’s implementation went faster because it was a Cloud solution. However, I saw a presentation by one company that had successfully implemented their Cloud-based demand solution in five months, which is very quick.
Potential customers for Cloud solutions do worry that a Cloud solution might not be as secure. Steve Miranda wanted it to be crystal clear that if customers buy their Cloud solutions they will be secure. He discussed in some detail the encryption involved in writing data into and out of the Oracle databases.
Miranda concluded his remarks by saying that all companies should be experimenting with Cloud applications in order to learn. This is not an all or nothing proposition, companies can operate in a hybrid environment where most applications remain on premise, while they get familiar with the new Cloud applications on a small scale.
This article was written by Steve Banker from Forbes and was legally licensed through the NewsCred publisher network.