Oracle goes after Workday, SuccessFactors with Fusion HCM

In a webcast, executives hint at a big SaaS focus for Fusion Applications

Oracle is getting ready to challenge SaaS human resources vendors like SuccessFactors and Workday with Fusion HCM (human capital management), one component of its long-awaited Fusion Applications suite.

While all Fusion Applications will be deployable on-premises, during a webcast event on Wednesday Oracle executives spent much of the time laying out the details and benefits of running Fusion HCM in the cloud.

Oracle is now the industry's second-largest SaaS provider, with 5.5 million users being served by its Cloud Services division, said Steve Miranda , senior vice president of Fusion application development. That unit provides traditional application hosting, managed services and subscription SaaS (software as a service).

While Oracle will offer standard hosting for Fusion HCM, the software will also be available in multitenant form, he said.

Multitenancy differs from traditional hosting, in that it allows many companies to share the same instance of an application while keeping their data separated.

SaaS vendors rarely talk up the technical details of multitenancy. But they have used its benefits, which include the ability to apply upgrades frequently and more easily to customers, as marketing pegs.

To that end, "enhancements" to SaaS Fusion HCM will be delivered every six months, according to Oracle's website.

In addition, Fusion HCM and other Fusion Applications will have a single code line no matter what the deployment model, giving customers the ability to make an easy switch if desired, Miranda said.

Fusion Applications, which have been in development for about five years, are supposed to combine the top attributes of Oracle's various ERP (enterprise resource planning) product lines into a next-generation suite. Oracle has especially touted the software's superior user interface and the presence of analytics throughout the applications.

Fusion HCM's functional areas include payroll and benefits; compensation management; performance and goal management; and workforce prediction, among others.

It also has prebuilt integrations with Oracle's PeopleSoft, JD Edwards and E-Business Suite products. This provides some convenience for customers, but also underscores the fact that Oracle is expressly avoiding any suggestion that customers will be forced to move to Fusion. The heavy emphasis on SaaS could also help Oracle make sales into companies where they don't have much of a presence at the application level.

Instead, the vendor has pushed a theme of "coexistence" for Fusion and customers' current implementations, with adoption coming at the pace they desire. The strategy has limited downside for Oracle, since it will continue to collect lucrative annual maintenance revenues from customers who don't take to Fusion.

But some already are. Wednesday's webcast featured an appearance from Brian Ness CIO of corporate services at the Principal Financial Group, a financial services company that has gone live on Fusion HCM's Workforce Compensation module as part of Oracle's early-adopter program.

While any implementation "is going to have some bumps," and the company did, an overwhelming majority of Principal Financial Group's users have expressed positive feedback about the software, according to Ness. It plans to add more Fusion HCM modules over this year and next.

What wasn't clear from the webcast is when Fusion HCM or other Fusion applications will be generally available to customers outside the early-adopter program.

During September's OpenWorld conference, Oracle CEO Larry Ellison told an audience that general availability for Fusion Applications would be in the first quarter of 2011.

Under one interpretation of Ellison's statement, Oracle has missed that deadline. But Ellison may have been referring to the first quarter of Oracle's fiscal year, which begins in June.

Oracle executives did not take questions during the conference, and the company did not respond to a request for further comment Wednesday.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com

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