By Brian Kilcourse, Managing Partner
9/30/2008
Oracle descended last week upon the streets of San Francisco with all the flare typical of Ellison & Co. As in years past, the city made the otherwise unheard-of concession of closing off city streets to make room for a massive luncheon tent between Moscone Center North and South, creating more than the usual (for San Francisco) congestion and craziness. The weather also cooperated, and 40,000+ devotees of the software giant got to enjoy several beautiful days of San Francisco and upbeat messages from Oracle.
Here’s The Promise
As to the company’s message to retail customers, the company’s leaders delivered the good news of Oracle Retail version 13’s capabilities and promise. For new and prospective customers, it really does look good. In fact, the new version looks “gorgeous,” as Oracle Senior VP and Retail GM Duncan Angove said. In particular, the “contextual user experience,” the Retail Workspace portal, has a distinctively “web 2.0” feel to it. Oracle presenters consistently walked the audience through demonstrations portraying “day in the life” vignettes of retail business processes (for example, setting up a promotion), showing how different users have different views via the portal. A key to enabling the context sensitive capabilities of the portal is the “single sign-on” capabilities embedded in the new version.
Underneath the nice looking user interface, the underlying suite seeks to accomplish what VP of Products & Strategy Dave Boyce described as “crossing the chasm between planning and execution systems” to achieve “insight driven retailing.” How? The Oracle suite will offer retail “PIPs” (Process Integration Packs) that automate certain business functions, all built around the portal interface using an integration architecture that blends the capabilities of “best in class” applications. Or in plain English, that means that pre-integrated components will be delivered that automate a particular set of business processes. According to Boyce, these pre-integrated packages will each be delivered with a business program, a process model, and case studies. All the retailer has to do is follow the program and the business case will be realized, or so it is hoped. The overtly “business case” oriented thrust of the presentations was intended to reinforce Oracle’s message to retail CEO’s: deploy a consistent technology platform that enables better ways of working, so that the retailer can propagate improvements and innovations quickly.
Oracle promises that PIPs for multi/cross channel business processes and Siebel Loyalty/POS will soon be available. Longer term, the company envisions a “distributed order orchestration” capability to manage order and fulfillment across any retail channel.
There’s the Rub
For existing Retail Suite customers, the path ahead isn’t quite so clear. In the prepared presentations, there was nary a peep about the obstacles that “legacy” users of Retek version 10 and 11 or users of the first “Oracle-ized” version 12 (whose implementations are barely 2 years old), would have to overcome to upgrade and take advantage of the new features in version 13 and beyond as they become available. It’s not even clear to what extent customers will be able to access the older versions through the Retail Workspace user interface.
RSR has pointed out before that “like most ‘legacy’ customers of software solutions that get consolidated into larger suites, Retek customers are looking for a roadmap, but the reality is that there is no easy road, and they will have to re-implement the application to take advantage of all that the new architecture has to offer.” This week in San Francisco (nearly a year since we made that observation), Oracle leaders still had very little to say to allay existing customers’ concerns. No incentive plan was presented for them to begin the transition, nor did Oracle offer a technical roadmap, or even a gap analysis. One executive from the technology company expressed a hope that the business case for implementing the new functionality of retail PIPs will be sufficiently compelling that objections will simply be blown away (retail CIO’s will immediately recognize this as the kind of “wishful thinking” that can get them fired).
Of course, the technical reasons for the silence are real enough. “Legacy” Retek was built using older Oracle technology, and retailers licensed the source code (meaning, they often had to – and did – modify it). Oracle architects are now working to identify those parts of the older architecture that are least likely to have been user-modified, in order to be able to make recommendations for moving forward. A key to this is in identifying how to migrate customers to the new data model.
These are encouraging signs – but it’s still hard to get to anything definitive. In the meantime, Oracle has increased its annual maintenance fees to 22%. Additionally, it’s important to remember that retailers who modified and then implemented earlier versions of the Retail Suite are working through significant amortization streams. So costs are mounting. What’s to keep legacy users from 1) deciding not to move forward at all, or 2) opening up the bidding for new capabilities by issuing an RFP? Neither one of these options is particularly good for Oracle.
Oracle marketeers hope that the “business plans” being delivered with the PIPs will be so overwhelmingly positive that retailers will look past their concerns – and perhaps their anger – and stick with the Oracle game plan. Those had better be some knockout business plans! Given the challenges that retailers generally are facing today, v.13 sounds like a very hard sell to existing customers.
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