Oracle Corp. (NASDAQ: ORCL) announced the general availability of Fusion Applications during Wednesday evening's keynote and unveiled the company's new Platform-as-a-Service and Social Network offerings.
We are positive on GA of Fusion Apps, though we continue to believe that customers will proceed cautiously. Oracle's entry into PaaS is more interesting given the associated TAM and the fact that it could improve Oracle's competitive position, said Ross MacMillan, an analyst at Jefferies.
Oracle announced general availability of Fusion Applications following a controlled release to about 200 customers earlier this year. The management attributed the delayed release of Fusion Applications to unanticipated challenges to re-writing their applications.
Oracle designed Fusion Applications to run in the cloud and on-premise, include industry standards (i.e. Java and middleware), have a service oriented architecture, rely on security built into middleware, the database and OS and include a new user interface with built-in BI and analytics.
The company unveiled a new Platform-as-a-Service (PaaS) offering called the Oracle Public Cloud. The base layer of the Public Cloud includes database, Java, data, and security services that dynamically support Fusion Applications or custom applications.
Importantly, Oracle's PaaS relies on virtualization, which requires customers to use separate database instances to store data and compares with salesforce.com's (CRM) multi-tenant model, which is built on a shared database.
Although Oracle's management argues that virtualization offers greater flexibility for customers and improved data security over a multi-tenant model, salesforce.com's track-record and success could suggest otherwise.
In addition, Oracle emphasized the Public Cloud's use of industry standards and its interoperability with other clouds (private and public such as AWS) as key differentiators versus competitors' offerings.
MacMillan finds it interesting that management repeatedly called out Salesforce.com, commenting that the company relies on an outdated multi-tenant architecture and uses a proprietary development language that drives vendor lock-in.
Reading between the lines, Oracle's comments may mean that Salesforce.com has become a better competitor and whether Oracle can take share in SaaS and establish itself in PaaS is to be seen.
Our thesis on Salesforce.com is unchanged since we continue to view the company as a best-in-class provider of SaaS-based CRM technology and a leading PaaS vendor, said MacMillan.
The Oracle Social Network is a secure collaboration tool that is built into Fusion Applications and includes document sharing, feeds, and enables real-time communication. The tool has BI and analytic capabilities builtin, which MacMillan finds compelling.
Oracle stock closed Wednesday's regular trading up 2.86 percent at $29.51 on NASDAQ, while in the after-hours the stock fell 1.36 percent to $29.11.