One hundred percent SaaS?

Published on the 25/07/2016 | Written by Donovan Jackson

oracle-hundy-percent SaaS

Forget about on-premise software. The advantages of software as a service are just too good to resist…

That’s the view of Steve Miranda, who heads up Oracle’s application development competency. In a recent visit to Australia, he made the bold claim that it is just a matter of time before absolutely every business – and he did say ‘one hundred percent’ –  whacks its appplications into the cloud.

Now, absolutes make good headlines, but they don’t always stand true in the real world. Mere caprice and any one of a number of other factors might mean at least some businesses keep their software chugging along in the basement.

So why does Miranda reckon that’s not going to be the case forever?

“There are a few obvious things: optimisation of resources, lowering of upfront costs [and the other advantages of cloud which no longer come as a surprise]. More than anything else, though, it is because cloud enables you to increase innovation cycles,” he said.

As an example – and it is a good one – Miranda explained that Oracle has re-architected its software to deploy to all customers simultaneously. That, he said, means it can get feedback faster, and since the software is identical rather than customised (“literally identical,” he stressed) it allows Oracle itself to move from what he described as a vicious circle of long development times, to a more virtuous one of shorter development cycles and immediate feedback.

“That means we make better software faster. Over time, this is the model that all our customers will want. The benefits of SaaS means they will be able to better deliver value to their end customers faster.”

While Miranda didn’t mention it, his discussion was timely in light of today’s announcement that Oracle will purchase Netsuite, the built-for-web ERP solution, to bolster Oracle’s pure-SaaS offerings in the medium enterprise space. A space it obviously deems worth the US$9.3 billion price tag.

But doesn’t access to precisely the same software negate any potential opportunity for differentiation? After all, businesses everywhere have customised software throughout the ages to get a closer fit or a competitive edge. Exactly the same sounds nice to sell, but not necessarily nice to buy.

“Well, this is why we didn’t just take our old software and host it, instead choosing to rebuild it from the ground up,” said Miranda. That does two things: it introduces a modernised technology stack built with industry standards. It also means a highly modular set of applications and services. “This enables customers to configure and personalise the software to create something which is unique to their organisation.”

Crucially, Miranda said this doesn’t equate to customisation. “Customisation is anything that prevents an automatic upgrade.”

And just how ready and willing is an enterprise software user to allow their vendor to decide when and how upgrades take place? “Well, if we look at personal software, that’s what we’re used to today. Your apps update automatically without any impact on your data; you personalise that software, it survives the upgrade. We’re taking those concepts in personalisation and applying them to enterprise class software.”

He added that new features which may come with an upgrade are switched off by default, so after the update, things work just as they did before – and being incremental, there aren’t ‘big bang’ changes between one version and the next.

You might be tempted to dismiss Miranda’s firmly held belief in the inevitability of 100 percent of businesses ‘going SaaS’ as a bit kooky. But he has the credentials to back his conviction: he’s been with Oracle since 1992 and led the engineering of the ‘next-gen’ Fusion Applications.

Still. While the benefits of the cloud and software as a service are undeniable, we know of more than a few businesses today which are happily running Windows XP. The SaaS stampede could yet be a ways away.

Questions or comments...

  1. John Blackham

    SaaS and On-prem software are fundamentally the same. Both can be “highly modular”. This was the aim of ERP companies way before SaaS was heard of. Remember OO and products such as Protean from Marcam or JDE’s OneWorld. Both promised an end to customization. Both were wrong, both companies died as a result, and in JDE’s case ended up inside Oracle. In fact the exact opposite of Mr Miranda’s claim is true, SaaS kills innovation …unless you think that every user having access to exactly the same software features give any company a competitive advantage. As Gartner said in 2009, until SaaS (specifically multi-tenant) can offer customization that will support any business requirement, it is a non-starter for serious businesses.


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