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November 21, 2007

Postscript on WSJ Story

Wall Street Journal BizTech writer Ben Worthen penned a story with a colleague that made print yesterday regarding the impact of M&A (consolidation) in the enterprise software space. As Ben usually attempts to do in his blog, his focus was on the lived and real impact as told by real IT folks in real organizations. While the Street measures value in a rather predictable set of criteria... those of us living the 'dream' of bigger and better have other experiences that are part of the story (not always told).

As I shared with Ben, I have been a customer of Oracle for nearly 15 years. In our environment here at Case Western Reserve University we have made some strategic decisions that have drawn us more tightly into the Oracle world. In other cases, Oracle has made some business decisions that have brought us closer to them ;-). Their acquisition of the Steltor calendaring product to be the foundation of the Oracle Collaboration Suite and the purchase of the tool set managed by Rich Pickett, then at Princeton, which morphed into Oracle Portal are two examples, along with the better known PeopleSoft acquisition.

Several dozen colleagues and friends have emailed me regarding the WSJ story. Of course, it turns out that our experience is not unique nor are we 'so' special here at Case Western Reserve University. As I've shared with a number of correspondents I know very well how complicated the tools are and I have a significant appreciation for what it takes to bake application integration. Why we as enterprise customers settle for half-baked and poor software code is the topic of another blog entry. The reality is that we've been conditioned by industry and over the past decade have largely resigned ourselves to this being the general state of affairs.

With pressure from the Street to deliver quarter over quarter results, those in the sales organizations and business units within corporations like Oracle face a difficult set of challenges to do right by their customers and their shareholders. As the stack of services offered by these integration giants grows larger and more complex, execution, agility, and rock solid customer engineering support seems to decline proportionately. While predictable, those of us in enterprise organizations like Universities face rising expectations from our own customers that are difficult, if not impossible to meet. As I shared with Ben from the WSJ... the result is that moving forward, organizations like Case Western Reserve will be looking to the 'promise' of software as a service as the general blueprint for reducing the exposure and vulnerability that we face as M&A activities continue in the market during a period of rising end- user expectations, growing complexity in corporate strategic acquisition efforts, and the insatiable appetite of many giants to absorb (innovative and promising)'pieces' of solutions as they attempt to bake them into a single offering. While Oracle has my business today... we have offered those in Oracle (and other of our vendors) who are interested in listening that the long overdue promise of Oracle-on-Demand (and other SaaS architectures) is going to be critical to organizations like ours if we are going to focus on bringing value to our customers here at the University. There are few alternatives that present themselves given the realities of our human, technical, and fiscal resources.

A number of colleagues who have emailed me asked whether the WSJ got my comments right... Some expressed skepticism that either the Journal mis-represented my views or that I was simply hopelessly naive.

Ben did a fact check (as he has always done in the past) and this, for the record, is the verbatim response I shared with him.

We use Oracle Peoplesoft for HR, Finance, and [soon] Student services. We use Oracle Collaboration Suite for calendaring and other collaboration tools. We use Oracle Portal to enable renewing library books, connecting to the Blackboard course management system, checking on online payments, ordering books for courses and other services. Oracle has consistently told us (read -- sales) that they are making all three software suites transparent, fully integrated, and customer friendly. [fusion is not the silver bullet... never has been]. The result is that there are, in reality, more than 5 years after the first set of promises, three separate and largely independent products. [From our perspective this]has been made only more of hassle and nuisance with the acquisition of PeopleSoft which also stands alone with its own portal-like technology. We have realized no savings associated with software or software maintenance and basically must continue to invest in very expensive [and scarce] talent, along with hardware, and other related costs which has actually cost us at least $100K in extra costs because the promised transparent, integrated solution has not materialized and has, in reality, wasted thousands of hours of [internal] developer time. The cost of maintaining each of these three systems ranges from $250K to $500K over five years just for the software maintenance, not to mention all the associated acquisition and maintenance costs for hardware, OS, and technical staff.

As always, your comments are welcome.

Lev Gonick
Case Western Reserve University
Cleveland, Ohio
November 21, 2007

Posted by lsg8 at November 21, 2007 11:04 AM and tagged

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