After getting star billing, Oracle's Fusion Applications take a supporting role

Some 85 percent of the 650 Fusion Applications customers so far are going with a cloud deployment

Last week's OpenWorld conference made on thing clear: Oracle remains committed to its next-generation Fusion Applications but massive growth in the product line is probably not around the corner.

Unlike in past years, Fusion Applications received no top-level billing or even much mention in OpenWorld's major keynotes. Even the Fusion Applications brand name seemed downplayed in favor of terms such as HCM Cloud, for Oracle's human resources software.

Fusion Applications are the result of a massive development effort that saw repeated delays until the product line's general availability in 2011.

While Oracle has always stressed that Fusion Applications can be adopted in a "co-existence" fashion with older products, it's not positioning them as the be-all, end-all of its future applications strategy.

"Fusion Applications form the baseline for what we've delivered in the cloud today," said Chris Leone, senior vice president of applications development, during a question-and-answer session at OpenWorld.

"In order to accelerate our time to market in a couple of areas we made some strategic acquisitions," he added, referring to purchases like marketing software vendor Eloqua.

But Oracle is not phasing out the Fusion Applications brand name, Leone said. "I think we're just trying to simplify what we've been doing."

There are more than 650 Fusion Applications customers today, with about 220 of them live, Oracle said in an emailed statement.

Both Fusion HCM and Fusion CRM have 300 customers each. In both cases, 100 customers are live for each application. So far, 50 customers have chosen Fusion ERP, and 20 of them have gone live with it, according to Oracle.

Oracle had previously said more than 400 customers had bought Fusion Applications, suggesting some momentum, although the total remains only a minuscule percentage of its overall applications base.

"Over the past year they did a poor job marketing [Fusion Applications]," said analyst Ray Wang of Constellation Research.

Still, with Fusion Applications, Oracle has been getting some "key wins" lately over the likes of Workday and Salesforce.com, Wang said. "They seemed at first to be exceptions, but they seem to be gaining some traction," he said.

It's not surprising that so few initial Fusion customers are for ERP, according to Wang. "In general it's hard to replace core ERP," he said. "However, newer companies are looking to Fusion Apps for ERP."

Meanwhile, some 85 percent of Fusion customers are choosing the cloud-based deployment option, according to Oracle.

An Oracle executive wouldn't say whether the company is encouraging customers to go with SaaS for Fusion because it's reportedly too difficult to install them on-premises.

"Our strategy is to help customers make the right choices for their business whether it has to do with their existing investments in Oracle or moving to the cloud," said Steve Miranda, Oracle executive vice president of application development, in an emailed statement.

Oracle hasn't figured out how to avoid every strategic roadblock in front of Fusion, however.

It still has a massive installed base of customers running its other business application suites, such as JD Edwards and PeopleSoft, on-premises, and it will likely remain that way for quite some time.

A high-level roadmap session for Fusion Applications held during OpenWorld drew a nearly full house of attendees, suggesting there's ample interest in Fusion if not an overwhelming number of customers ready to pull the trigger.

Leone, who led the roadmap session, had to promote the value of Fusion while also taking pains to stress Oracle's commitment to its Applications Unlimited strategy, which promises customers that its older product lines won't go away anytime soon.

"We will continue to invest and bring all of our applications forward," Leone said. "We've had no less than two major releases of every application since 2006, 2007." A healthy majority of Oracle applications customers are also keeping pace with the latest releases, he added.

Some observers have suggested that Applications Unlimited is holding back customers from adopting Fusion.

Indeed, Oracle released version 12.2 of its E-Business Suite product earlier this month, an update that provides long-desired features such as online patching.

"Oracle has built a very good product with EBS 12," Wang said.

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

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Tags cloud computingenterprise resource planningIT managementCIO roleinternetOraclesoftwareapplicationsCustomer Relationship Managementit strategyopenworldInternet-based applications and services

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Chris Kanaracus

IDG News Service
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