Pricing
One thing that Oracle has not done is to simplify the pricing of these modules. Even within the SCM Cloud each individual element has different pricing and in some cases named user pricing.This puts an unnecessary overhead on companies struggling with administration costs for managing cloud solution. Most pricing for cloud solutions is simple and yet Oracle still appear to be maximising their revenue by replicating their on-premises licence model in the cloud, except they are, at least, using monthly costs.
If Oracle still struggle for cloud sales it will be interesting to see whether they finally decide to simplify the pricing model that they have and reduce its complexity. The difficulty they may have with this is that the revenue generated by each component possibly goes into the development for that solution. This may seem sensible but it may also put them at a disadvantage against companies that simply offer a single code base and a single monthly price.
What will be important is how effective the channel are in selling Oracle ERP cloud to their customers. The recent announcement to extend SaaS into the partner channel should drive new sales, even if it won’t begin until May.
Conclusion
This is a welcome update from Oracle and demonstrates that they are serious in trying to migrate their on-premises customer base into the cloud. It appears that their cloud solution is almost ready to onboard some of their major customers. However many will not want to be the first to be doing that and it will be interesting to see how much and how long an implementation takes to accomplish.
In terms of the future Rondy Ng, senior vice president, Oracle Applications Development alludes to the direction that Oracle will be moving in saying: “Oracle continues to maximize business value for our ERP Cloud customers by delivering frequent, customer-driven innovations at a pace unmatched by any on-premise or prior-generation ERP packages offered as SaaS.
“Our focus and continuous investments in industry specific capabilities significantly broaden our support for customers from service-based to now product-based industries as they adopt cloud.”
Oracle will need to maintain that focus but have to start the migration process for their major customers or be at risk of losing some of them to the likes of SAP, Workday, Salesforce and Netsuite. If the solution has come of age, it needs to earn its adulthood with a few big wins.
