Oracle posted some storming Q4 results last week, beating both Safra Catz’s own guidance and analyst expectations. Total Quarterly Revenues were $11.1 billion, up 1% in USD and up 4% in constant currency compared to Q4 last year.
Oracle CEO, Safra Catz said “Our high-margin Fusion and NetSuite cloud applications businesses are growing rapidly, while we downsize our low-margin legacy hardware business. The net result of this shift .. to cloud applications was a Q4 non-GAAP operating margin of 47%, the highest we’ve seen in five years.”
That all sounds very healthy.
Oracle CEO, Mark Hurd continued with “Our Fusion ERP and HCM cloud applications suite revenues grew 32% in FY19.”
Again, this sounds positive. Others, such as Diginomica, highlight the mentions of recent wins from competitors, including Diebold Nixdorf (from SAP), Helmerich & Payne (from Epicor), Tiffany and Experian (from SAP/Microsoft).
This is also a very good sign. This is where most of the reported coverage finished however. There was a hidden gem at the bottom of Oracle’s press release that I haven’t seen highlighted in many reports. Mark Hurd also said:
These strong results extend Oracle’s already commanding lead in worldwide Cloud ERP. Our cloud applications businesses are growing faster than our competitors. That said, let me call your attention to the following approved statement from industry analyst IDC:
Per IDC’s latest annual market share results, Oracle gained the most market share globally out of all Enterprise Applications SaaS vendors three years running—in CY16, CY17 and CY18.
Very interesting indeed …
Oracle held a webinar tonight, unveiling their newest offering – Oracle Soar – with the strapline “the last upgrade you’ll ever do”.
The webinar started with Larry outlining the premise that if you’re an eBusiness Suite Financials customer you can ‘upgrade’ to ERP Cloud (here the term ‘upgrade’ was used in the context of moving from EBS to ERP Cloud). Then – thanks to the continuous delivery model giving you incremental improvements – you’ll never need another upgrade project ever again.
Larry looking comfortable in jeans and trainers
So Oracle Soar is the term for moving to the Cloud and ridding yourself of upgrades? No, not really.
In the next part of the webinar Larry covered ‘how’ the upgrades happen. Oracle will deliver automated upgrades from EBS to ERP Cloud (or Fusion, as Larry repeatedly called it). This part sounded very smart as the evaluator tool looks at integrations and customisations, plus there’s a configuration analyser which looks at config and memory etc. It then automatically configures your Fusion instance in the Cloud. The data is then automatically extracted, transformed and loaded. Larry claimed that it’s all completely automated, however I would think semi-automated is really the best that you can hope for here, given the complexity of some on-premises implementations (and Oracle have nodded to this by also offering consulting services alongside the automation).
Oracle are leading with EBS Financials (12.x and above), however other modules and Apps Unlimited systems (including PeopleSoft) will follow at some unspecified point in the future.
So, Oracle Soar is the automation that upgrades you from Apps Unlimited/on-premises to the Cloud? No, not really.
Next Larry brought Steve Miranda on-stage for a product demo of a very impressive extension of the base HCM Cloud offering that Oracle had built for Verizon. Steve asked Amazon Echo / Alexa for any outstanding approvals just using voice interface. Alexa read out an absence request. Steve asked for the employee’s remaining vacation balance, which Alexa gave him. Then Steve then approved the the absence request.
It was a very slick demo, and a wonderful glimpse of the future, but I was scratching my head to understand what this had to do with Oracle Soar. Maybe they just wanted a fun interlude?
In the next segment it was announced that there’s a consulting offering alongside the technical tool – Oracle Consulting Service will provide up to 30 integrations and custom reports.
There was also mention that Fusion comes with a large library of over 100 pluggable integrations (potentially reducing the amount of integration rework when moving from EBS) and – given the broader functionality in Fusion – the opportunity to retire some customisations.
Larry then returned to the Fusion sales-pitch, discussing the level of automation in ERP Cloud (automated consolidations enable continuous daily closes, invoices and expense reports are scanned with near 100% accuracy, automated fraud detection, extensibility with Visual Builder etc).
All very interesting and exciting, but it seemed that we’d meandered away from Soar again.
Beth Boettcher (SVP North America Applications Consulting) came on stage next and talked through some mock-ups of a dashboard that Oracle will use to help walk clients through the process.
It looked very slick as a templated project delivery and there will be some clients who can work within the bounds of the template that’ll find it useful. Beth also did well to fit all of the offerings (including Oracle University, Customer Success Manager etc) into an aviation theme.
I’m sure when the marketing material arrives the service will be a lot clearer, but the initial announcement was a strangely structured 40 minute session, with Larry unveiling the technical wizardry, a couple of interludes where the product was highlighted and the services offering bolted on the end.
So what is Oracle Soar?
Oracle Soar is the umbrella term for a set of services that migrate on-premises customers to the Cloud by:
- helping with the difficult parts of implementation by automating them (requirements gathering, integration, migration), and
- providing a templated project structure and consulting services to accelerate the move to the Cloud
There will be an on-demand replay posted here if you wish to see the announcement for yourself.
Oracle have announced that they’re stopping the practice of bi-annually upgrading HCM Cloud and are going to roll the enhancements into the quarterly updates instead.
It’s a move that isn’t particularly surprising as large upgrades are being phased out by most vendors in favour of continuous software delivery. Particularly when looking at Cloud vendors, most are eschewing large upgrades and delivering much more frequent incremental improvements instead (think Microsoft and Office 365, or Amazon and AWS).
So what does Continuous Software Delivery (CSD) mean for customers?
Instead of having to wait 6 or 12 months to get the improvements now clients will have to wait a maximum of 3 months. Innovations will flow from Oracle to customers much quicker this way.
Removal of Upgrades
There was a fair amount of inconvenience associated with upgrades – they have to be planned in advance, there is considerable testing effort and there is some downtime involved (although that was being reduced in more recent upgrades).
Larger Quarterly Updates
Of course, the quarterly updates will be slightly bigger as they’ll contain more enhancements than they currently do. They’ll still stick to the same schedule (1st/3rd Friday of the month) and customers will be able to choose their months so it fits around their business calendar – i.e. you could be Jan/Apr/Jul/Oct or Feb/May/Aug/Nov or Mar/Jun/Sept/Dec. You’ve never going to be more than 3 months from an update, but at least you can avoid a busy month.
Ability to Defer Functionality
Although Oracle will deliver the functionality to all customers in the same updates (aside from the monthly staggering) customers will be able to leave some ‘switched off’ until they are ready to roll it out. They’ll be able to defer the deployment until their business is ready.
Those who’ve elected to be on monthly maintenance will be largely unaffected by this change (aside from the obvious removal of upgrades and the inclusion of enhancements in the monthly updates).
I attended a great webinar recently given by Chris Leone (Oracle, SVP Apps Development) on the Cloud Customer Connect site. Chris walked through some of the HCM Cloud UX changes coming in Release 13 and the updates in 2018.
First of all, if you’re not a member of Cloud Customer Connect, you should be. There’s some great content on there and regular webinars.
So, what did I learn from Chris?
During his introduction slides we obviously heard about Oracle’s commitment to embrace leading-edge technology, their desire to keep the UX fresh etc. One comment I really liked was:
Deliver a warm and approachable HCM tool that people will use
We’ve all used applications in the past that have been fussy over how steps are performed, or been told “you just need to do the process this way because that’s how the system works”. This is starting to change though and we’ve recently had a client pass-up on the chance of training as the system was intuitive enough for them to work out without assistance. “Warm and Approachable” is taking it a step further than just ‘intuitive’ so I look forward to seeing that in practice.
These are the enhancements that I noted during the webinar:
- All Self Service pages will be moving to a new mobile responsive layout over the next 12 months, making mobile use significantly easier
- Type-ahead in fields
- Better prompting/look-ups
- A new homepage
We’re going to get the choice between a new twist on the existing formats (shown on the left below) and a more contemporary version in a vertical layout (on the right):
The vertical layout is particularly interesting as it combines several of the areas that you’ll want to see into a single page (Quick Actions, Tasks, Infolets). This is the MSS view:
It has tabs at the top to switch between Employee and Manager actions (there could be other tabs here, for HR perhaps), quick actions on the left, and the applications on the right.
Some other really great functionality that Chris teased was dramatically simplified pages.
For some flows (e.g. promotion) you can select the areas that you wish to amend:
This means that the user isn’t shown sections that aren’t relevant.
Also, the areas of the screen are broken down into collapsing sections:
So when a user has finished a section and scrolls down the next area automatically expands. The demo was very slick.
The UX has taken a big jump forward over the last couple of years, however it’s continuing at the fast pace with some well-considered enhancements to keep making life better for the end-users.
The full 45 minute video can be found here (Cloud Customer Connect account required):
Every year, Mary Meeker – partner at Kleiner Perkins Caufield & Byers – releases her ‘Internet Trends Report’. It is probably the most eagerly awaited slide deck of the year (alongside Stacey Harris’ HR Systems Survey and Research report – which if you haven’t yet filled it in, you can do so here). Mary’s Internet Trends report gives a facts and figures based summary of the current state of the marketplace, and predicts how that’ll change over the coming years. It’s lengthy, but always a treasure trove of information.
The slide deck can be found here, however I’m going to highlight a few items of interest and point out how they’re relevant in the world of Oracle.
Mobile vs Internet use
Both mobile and internet use are still on the rise, however the increase in mobile handset shipments is decelerating. Are we approaching saturation point with mobiles? There are 3.4Bn internet users – approx half of the World’s population – and this is increasing by 10% each year, with the number of mobile handsets shipped at just below 1.5Bn – with more than 80% of those Android.
What’s also intriguing is the number of hours spent each day using your mobile is now averaging 3.1 hours (up from 0.3 hours 8 years ago), however this isn’t coming at the expense of Desktops/Laptops (which averaged 2.2 hours last year and 8 years ago). So the amount of time we spend interacting with digital media has increased hugely in that time.
Oracle has improved the responsiveness of the HCM Cloud in recent versions, and this is – rightly – going to continue in future releases. It’s important that the desktop interface is still improved at the same rate, as the figures show that isn’t declining.
The report states that 20% of searches are now performed by voice command, rather than text input. In the age of Siri/Google Assistant/Alexa this should be no surprise, but it does illustrate that we’re on a path towards voice interfaces being more commonplace. The accuracy of systems understanding voice commands is also on the increase – it’s now around 95% (which is about the same as humans).
Clearly chatbots (whether interacted with via voice or by typing text) are the future for much of HR Self Service interactions.
Doormen = Foremen
We were tickled by the pictures of doormen in apartment blocks becoming more like foremen and needing a room to use as a warehouse for holding all the parcel deliveries that come in via the post for residents each day.
Lowe’s Augmented Reality app to provide in-store directions to goods on their shelves is very cool.
Augmented/Virtual Reality is going to be important in the field of learning. Most people learn better by ‘doing’, so a situation where trainees can perform a task in a virtual environment – free of consequences if they make mistakes while learning – is a useful tool. I’m not sure we’ll see AR/VR in HCM Cloud any time soon though.
Instant Gratification and Gaming
Millennials are growing up surrounded by gamification, and apps and games that give instant feedback by ‘levelling up’ quickly. Different games are preferred by the generations, but many of the mechanics that drive players to return are consistent across the games. We’ve all seen sites that rank your profile as XX% complete, but what is newer is the rise of services such as Twitch – where live games are streamed to interested viewers – which is considerably more popular amongst younger generations than older people. An example of this it the recent League of Legends World Championship received 43 million unique viewers.
Oracle Cloud Connect now highlights its top 10 users of the month, rewarding those who’ve put effort in to the platform. Instant feedback is also coming to the HCM Cloud, in the form of kudos now becoming real-time performance feedback, rather than the annual routine that we used to follow.
Developer / Designer Ratios
A short topic that caught my eye was the change in Designer vs Developer ratios over the last 6 years. Back then, companies such as Atlassian, IBM and LinkedIn reported ratios of 1:25, 1:72 and 1:11 respectively, with Developers far outnumbering Designers. The ratio has moved in significantly however, with companies now reporting a ratio of between 1:5 and 1:9.
Oracle’s Apps UX team have been at the forefront of designing the HCM Cloud user experience, and can be seen at most Oracle events evangelising the design paradigms that they’ve used in this process.
The Rise of Digital Healthcare
The number of companies that focus on personal health has grown very rapidly, but this growth isn’t just in the field of wearables, as one might expect. Companies offering health-related datasets to dramatically reduce the time needed for clinical trials (and hence speeding time-to-market), patient Electronic Health Records and tests for genetic disorders that you can take via the mail (e.g. 23andMe) are all areas of growth.
Oracle HCM Cloud has a whole module for this, My Wellness.