We hear about digital disruption all the time, frequently quoted is the impact of something like Uber or Airbnb. How technology like mobile allows us to completely transform how we do things, and in many cases, change it forever.
Technology has always changed, at a recent Oracle Modern Business Day, I heard about technology in accounting, the introduction of the calculator, the telex machine, the fax, the computer and the PC, but all these technology changes were static machines. Price points changed, adoption was quick but it was always a direct purchase.
Cloud is a game changer in so many different ways, it allows us to consume technology rather than own it, and it is accessibility, you only need a device and wifi, which means it has simply become a commodity.
I work in the applications space, and this article is about Software as a Service, applications cloud, but a lot of it is relevant to all cloud.
Cloud is driving disruption in the market, organisations want to take advantage of the newer technology because their customers demand it, and those that go quickly have a first mover advantage. Where the technology changes how they do business, replacing legacy systems and practices gives them another advantage, or rather removes the disadvantages they had when new entrants with no legacy ,move into the market. Think about online only banks, they are popular because they are easy to use and have lower costs. This is because they have no high street branches and legacy systems to maintain. The bigger banks have caught up with mobile and online banking, have reduced their high street presence but still have legacy to deliver to those loyal customers who don’t want change.
Disruption is not just for the consumer, it is also for the provider. Look at how the big vendors are clambering for market share of cloud. There is no doubt cloud is here, now, the just talking about it is over; the move to cloud marches quickly on. Cloud is not just about hosting, and I believe there is a lot of deliberate confusion and clever use of words from all the vendors, and each have their own definition of what makes a ‘real’ cloud, but what is true to all, is that cloud matters.
Oracle has, just like the example of the banks, a need to offer cloud and satisfy its traditional customer. New entrants to Cloud, claim they are growing rapidly, and when you start at zero, that is easy claim to make, but are they delivering happy customers and shareholders? Oracle has embraced cloud, it took a while to get the Fusion product set out the door, but they recognised what consumers wanted and got their development tool set completed, through enormous internal R&D and acquisitions. This toolset enabled Fusion to deliver the modern technology the market was starting to demand, and this included a move to a cloud deployment model. The markets have really welcomed this move, Forbes recently reiterating what Oracle have been telling us for a while, they ARE a Cloud company. Oracle do have an enormous pre cloud or on-premsie customer base, who need value for their support costs; Oracle promised Apps Unlimited and have delivered. Their customer base has on premise, hybrid (cloud co-exisitance), and cloud customers, the later group including a sizeable net new customer base.
Cloud as a subscription model means that enterprise software is available to a much wider market, including those organisations making the most of the wider digital disruption and are themselves growing rapidly. These organisations are adopting Oracle Cloud as net new customers, and this is disrupting Oracle itself. It changes the way Oracle sell, many of their acquisitions have had mid market customers but Oracle Applications traditionally did not and it has resulted in changes to the Oracle Sales function. They cannot spend as much time in the sales process for a mid market customer as they do a very large organisation. Oracle Direct, who traditionally did smaller technology sales, has to morph into a function that can work smaller deals effectively, and here the disruption, or change, is from Oracle’s own CX Sales Cloud; the new technology allowing them to be much smarter at identifying and qualifying leads.
Cloud means a much shorter implementation project, a much shorter Time to Value, and this is disrupting the Partner Community. As Oracle moves from an upfront licence buying model to subscription, this affects the traditional Systems Integrator, who had bigger, longer projects and possibly continuous revenue as a Managed Service provider. This has opened the partner market up to new entrants who in their own way have no legacy business model to convert, who can deliver just cloud, cheaply and effectively. This is an exciting time in the Partner Community where niche players are shining as first movers, new alliances are being formed, new business offerings developing and larger partners reacting to the change at a slower pace. All of this disruption is good for the customer.
The implementation team is also changing, less technical resources and even functional consultants need to be more business orientated rather than how to looking to be an analyst for the next customisation. Configuration or extension to SaaS require innovative thinking when you can’t just add a custom object.
Cloud means a new customer profile, traditionally Oracle sold to IT, Cloud tends to be sold to the line of Business, and this is bringing disruption to user groups, who have new prospective members who are net new, possibly mid market, or the same organisations but different people, and less apps technology. User groups have to change to address this whilst supporting their traditional members. I personally am waking up to the customer intimacy of the mid market, and look to the JDE community who have been successful at this. User Groups need to understand the disruption to all parts of the Oracle ecosystem, to understand what it means and how, it in turn it disrupts us.
Lets go back to my first statement, digital disruption is changing the way we do things, and user groups are not immune from this. Our members want mobile, and most conferences have mobile apps, but we need to do more, our systems are out dated, our communications not social enough, and our members not engaged as much as they could be outside events. A simple example cloud has enabled ‘meetups’ which if we work with can encourage membership but that at first glance could be a threat. Similarly Google is quicker to find answers than our rich library content.
Digital Disruption, led by Cloud is exciting, and I personally am loving the challenge and the possibilities.