Reply to post: Re: Slightly off-topic question

Oracle co-honcho Mark Hurd can't wait to turn your $1 of IT support spend into $4 of pay-as-you-go cloud revenue

Anonymous Coward
Anonymous Coward

Re: Slightly off-topic question

In my experience. I started at a company that used legacy systems (VAX and terminals) in the 90's. They had a good idea of how much it cost them to run them and how much it would cost to update/redevelop them and it wasn't cheap.

Along came PC's and the promise of cheaper, friendlier software. The company accepted that it would be risky to develop their own software with their existing resources and went for an off-the-shelf product with a popular (at the time) Unix vendor. Naturally it required customisation but there were productivity gains with the integration of PC's and MS Office/email into the workflow. Turns out it was significant customisation. By the time they realised just how much, they were pretty much fully committed (think 3+ years and Y2K was looming and the old system definitely wasn't Y2K compliant). They went all in on a bad system that cost more but worked.

By the mid-2000's it was usable but the vendor was saying there was a new product and the old one was reaching end-of-support. Do they stay with it or develop something better in-house? They stayed, upgraded, found it needed more customisation and spent a load of money. Again, a bad system that was expensive to run but supported.

Fast forward to today. There was another iteration of this and the current product has almost reached end-of-support. They've moved from VAX to Sun to Windows/Oracle to Windows/SQL as the platform, but performance was never really the issue aside from a few specific annual tasks. Do they upgrade or develop in-house? Of their current staff, I would suggest that none has seen a capable system for running their business because of their experience with the vendors products over ~20 years, so developing one in-house would be a leap of faith.

The system was specific to the companies line of work, but it could have been any ERP system combining financials/HR/line-of-business apps. ERP promises to provide a flexible system to run your business that is difficult to develop in-house. Just realise that the flexible part in ERP is your businesses processes, not the ERP system.

So, your specific questions:

What exactly is offered by Oracle that is so powerful/critical/unobtainable that they can get away with obscene prices/licensing terms/business practices?

A mostly working system combined with an unwillingness to change for lots of financial/political

reasons.

Is Oracle software just particularly good at scaling for very large companies?

Oracle Financials was loved by accountants around 2000. Whether that is still the case is unclear.

Are execs getting kickbacks?

They get wined and dined and maybe a round of golf, but nothing too serious - it's mostly trying to keep the customer happy after major screw ups while the customer tries to figure out what they can drop to reduce their costs.

Is everyone just stuck in a "it's worked for 20 years, don't touch it" mindset?

They tend to be very complex systems that touch lots of parts of a business. Replacing them tends to require business re-engineering (and the associated politics), significant development effort and likely employing a significant team to do the development. Stories about failed software projects are a dime a dozen. Bad and working is better than the uncertainty of failure for large companies.

Do I have a remedy? Keep business critical systems separate to avoid a monster ERP that can't be touched. The people that manage the integration between the systems will find challenges, but at least know the systems/processes well enough to customise them when changes happen and have enough product knowledge to be able to assist with re-development or moving to another vendor.

TL;DR: people want an all singing, all dancing software package without realising that they will end up stuck on an expensive treadmill of enhancements, customisations and support. Then when they need to change, they can't fix a system that is dysfunctional for 80% of the company because no other ERP packages offer Helen in HR a way to manage leave across ten different countries with different holiday dates without extensive customisation....

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