After outlining the Project Fusion in early 2005, Oracle Corp undertook what became a six-year effort to modernize its core business applications. It is clear that Oracle has made Fusion a focus for the company and continued investment in this area with a steady cadence of updates since its initial release.
With the new release of Fusion, applications share common middleware (easier to integrate) and embed analytics (something that was arguably ahead of its time) and customers have the option of running their applications either on premise or in the cloud via software as a service (SaaS). The initial success of Fusion is much debated and the product still has not driven a re-acceleration in Oracle’s applications business. While Fusion has been released and iterated on, it has become clear that in many markets, software as a service [SaaS] will be an important method for deploying and running software.
In markets where levels of innovation are still rapid, it is likely SaaS will be the primary deployment for software. This trend has been building for some time, but its adoption likely caught Oracle by surprise. While Fusion was designed for SaaS deployment, the company lacked modern applications in many of the fastest moving markets. For example, while the Siebel assets included customer service capability, this piece was not to be released in the Fusion generation for some time and RightNow was acquired. The same went for areas such as recruiting (Taleo acquisition) and marketing automation (Eloqua). It is our view that Oracle needs to keep pace with market growth in these areas to ensure it is competitive in adjacent markets to its core on-prem applications business.