The Village View

Wednesday, December 27, 2006

Predictions 2007 - A necessary(?) evil

Here are a couple of things that I think we may see happen in 2007:

Oracle will announce "early" availability of Fusion Apps

In keeping with its own style of marketing, Oracle will announce availability of Fusion Applications in 2007 and claim it is "3 years ahead of SAP" (SAP's next major release is in 2010, although many smaller enhancement packages will be available before then). This "Fusion Apps" release will, in substance, not really be a new product, but rather a marketing ploy. I would imagine it would be some revamped version of E-Business Suite rebranded as Fusion (as Oracle has done with some existing middleware components). One purpose will be to jumpstart upgrades of, and commitment to, E-Business Suite as this product is the smoothest (and cheapest) upgrade to Fusion. The other purpose will be pure marketing


Oracle will double down on the SMB market

I anticipate that Oracle will extend its reach in the "S" part of the SMB business. To a substantial degree Oracle already plays in this space, mostly through its JD Edwards product line. However, there is still a white (or at least grey) space at the lower end of the SMB market that is not completely covered by JDE or EBS Special Edition. In addition, Oracle will likely feel the need to respond to SAP's recent increased push (both marketing & product announcements) into the SMB space. I see two possible Oracle actions in this space in 2007:

  • Acquire NetSuite or Salesforce.com. Larry Ellison owns the majority of NetSuite shares and the company has recently announced plans to file to go public. An acquisition (either pre or post IPO) would allow Ellison to cash out and would nicely fill in the space at the low end of the SMB space for Oracle. Right now, Sage and Intuit play heavily in this market. Ellison was also an early backer of Salesforce.com and there are constantly rumors of Salesforce.com being acquired. IBM or Oracle are, to me, the only real candidates. Salesforce.com would play nicely into Ellison's stated goal of having more subscription revenue for Oracle.
  • Increase marketing and investment in JDE product line. My sense is that a not-unimportant part of Oracle's "organic" growth is coming from the PSFT/JDE product line. With the Applications Unlimited announcement and the short term fear of being pushed to Fusion alleviated, customers have seemed willing to increase their investment in their PSFT/JDE installations. I'm hearing that JDE revenue has been strong recently. If Oracle's latest quarterly earnings results are any indicator, then Oracle will need to get application revenue from where it can. If customers are satisfied with JDE, why wouldn't Oracle push this product line?

Google moves into Enterprise Apps business beginning with CRM

I anticipate that 2007 is the year that lightweight CRM functionality will become commoditized through an advertising-supported revenue mode. I would imagine that the offering would start with Sales Force Automation, Contact Management, and maybe some simple Marketing Automation functionality, as these are among the most demanded. The solution will be delivered as a service (on demand) and I think Google is going to be the first one to do it.

The most effective route to market for an ad-supported application would be to focus on a large established online community. Such a community is easy to target and capture and generally shares similar solution requirements. Google has at least two such communities: Google Base and users of Google Apps for Your Domain.
Both of these user groups have both a need for a CRM product, and should generate sufficient page views to make it worthwhile for Google to offer the app.

A free, ad-supported, on demand CRM service could prove a useful tool to heavy Google Base sellers. Integration with AdSense, to allow analysis and automation of online advertising spend (Salesforce.com has already proven this is doable) and Google Checkout are no-brainers.

Likewise, if your company is already getting email, calendar and messaging functionality from Google(Apps for Your Domain) why not an easy-to-use CRM service? Click on a prospect and send them an email or IM, or schedule an event with them. I would imagine this would be most interesting to the low end of the "S" in the SMBs; say less than 50 employees.


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