Thoughts on the Cloud, IT Vendors and Enterprises

IT Vendors and Enterprises are in a middle of a generational change, as computing moves from On-Premise (from lots of customer data centers) to a smaller number of “super” Data Centers of IT Vendors: the Cloud.

This means that the IT as an Industry has caught up with other Network services e.g. Water or Electricity Networks where the production happens at the utility and else taps into the Network to consume the service. This allows taking advantage of the Economy of scale, commercialized labor leading to a better service at a lower price.

At the end of this change Enterprises will consume the data and IT from Utility Computing providers where all the complexity of running servers etc. is hidden behind a simple device such as the desktop Browser (similar to other Network providers using a water tap or power socket).

The Cloud provides all three layers: Applications (SaaS), Platform and Infrastructure as a service for consumption and more and more Enterprises are moving from buying on-Premise and Hardware to buying Cloud. This has been pioneered by’s AWS which provided basic computing services like storage and Servers in the beginning.

However, basic computing/storage (excl. Security and Reliability)has become a commodity like electricity. When buying commodities cost is one of the most important decision factors since there is no much differentiation. The major differentiation of Clouds is on the Platform and Application layer where the cost of these services can be looked at two days: the acquisition costs on day 1 or a more complex calculation of the TCO (Total Cost of Ownership) which is the cost of owning & running for a certain period of years. E.g. the TCO would also include estimated costs for the required integration of two or more Cloud applications.

A decade of Coexistence and a Unique differentiator for Oracle

For many of the Enterprise customers, the journey to the Cloud is increasingly combining on-Premise and Cloud Solutions and Oracles ability to promote a long term co-existence Strategy is a unique differentiator in the marketplace.

Digital Transformation and the Cloud

Many markets currently see a movement towards digital services offered by start-ups companies. While this is not a new shift e.g. eBay for second hand /used articles, it now also arrives at less elastic markets like the Financial Services. Since this also means a shift of revenue streams, the current market incumbents (like Deutsche Bank) try to react by introducing Digital Labs within their companies to offer the same kind of service to their customer base.

However, there are a few Pre-requisites for offering good & competitive digital services:

  • Agile culture & development methods
  • Networking capabilities within the markets and required suppliers (digital supply chain)
  • Data-driven decisions

The above pre-requisites are probably best supported by a Cloud solution rather then a on-Premise Solution. For Cloud Applications the customer does not need to take care of all the layers below, since HW, OS, Virtualization etc. are provided as a service. Also the deployment off a new Application version is much faster. Given that most data is now generated by devices or interactions of the User many surrounding entities such as Twitter or Facebook are available from the Cloud via a interface, Channel or Cloud Adapter. This data can also be analysed directly within the Cloud making data-driven decision much easier.

Companies who are reacting quickly to this change and execute this change along their customers might be able to become the new platform in a more and more automated exchange of data between different participating parties.

Crossing the chasm

Both, software vendors and customer’s Organizations are facing a new model, where Software is not delivered as a on-Premise installer, but as a Service, the Cloud.

crossing chasm

While large Software Vendors such as Oracle or SAP still provide a very feature-rich on-Premise version of their Software there are two real advantages for a Cloud delivery model: 

Agility of Software deployment: With many on-Premise Applications a new release takes approximately 2 Years until the software becomes generally available and another Year to upgrade and actually deploy the new release within the customer’s Organization. Currently a new release of the Oracle Fusion Applications (currently Vers. 11) takes approx. 6 Month and this will be shortened to approx. 3 Month until CY17. The Cloud allows to provides the innovations much faster to the Market and the customer to consume the innovation much earlier. Additionally, the downtime associated with new Releases is targeted to be also reduced by half.

Real customer Feedback: Since most customer within the use the public Cloud, the development (Engineering) Organization has access to real application usage patterns of the Customers using the software. For most Oracle’s on-Premise software there was also some form of Feedback from Customers e.g. Market Requirement Documents (MRD) or the Customer Advisory Boards, but this has the actual accuracy of the real interactions from the Users with the Cloud. This feedback provides the data to improve the areas of the product which get used the most.

Combining the feedback and agility (speed to market) also to improve the software much faster then in any other model.

For Oracle, the strategy remains to provide a complete set of SaaS Business applications as modules such as ERP, CX or HCM in the Cloud. Additionally a Marketplace is available where Independent Software Vendors (ISV) or Partners may provide additional software packages or point solutions:


Oracle’s Cloud also supports a wide spectrum in terms of deployment and use of the Cloud. A customer might also choose to migrate a bespoke legacy application in the Oracle Cloud using the IaaS or PaaS. This can also be used within large transformational programs where not all functionality can be provided from the Oracle Cloud. Certain bespoke applications can be moved to the cloud to be blended together with other Oracle cloud modules.


Together with the Customer Success and Customer Management team, Oracle has a very good understanding of how the software is actually being used and where the software needs to be improved e.g. which features are performing well and which features are not being utilized.

With Cloud Projects, customers also engage differently with a Consulting Organization, they expect to be pro-actively guide through all phases of the cloud Journey, anticipate their needs and Best Practices.

Oracle now provides pre-scoped services at every stage of the customer cloud lifecycle:

  • enable usage of SaaS Subscriptions -> Core Implementation Packs for Fast Go-Live
  • if using but not fully exploiting the Subscription -> Advanced Enablement Packs (e.g. Optimize usage)
  • if they want to do more with Saas -> Add-On Packs for Integrating with other cloud modules and other business extensions with PaaS

IT disrupting Organizational Pillars

From a Software Vendor perspective (like Oracle or SAP) most Organizations follow a disjoint approach on the Business or “Go To Market” Model.

Each Organization can be devided into three Pillars:

  • Planning
  • Operative (Execution)
  • Analytical

And within each Pillar different Software Vendor Products are used to organize and share the data. This might be Excel for Planning purposes or a Purchasing System for buying required Products.


The Planning and Analytical excersice is often done for many Supported HR or ERP Processes. E.g. Planning on Sales and Analysis of the Sales data. However, the Sales data might be stored in a different System then the HR data and even the HR data might be spread across different System to facilitate Workforce Management and Recruiting.

Of course, this is not only disruptive to the Business but also very complex (& Expensive) in nature.

As Oracle can be considered as one of the two “Full Stack” Vendors the Solution to this Problem is one broad set of Software Solutions that cover as much as possible of the required Functionality and to Integrate the Organizational Pillars and the different Operational Business Units.


To even reduce the Technical Complexity further, Oracle offers all its Fusion Products as part of the Cloud Solution. Meaning the Software is provided to the Business using a simple web Interface over the Internet.