Wednesday, 11 November 2015
The Elephant In the Room – On Premise is Dead! - Part II
Before we begin I will openly state from the outset that the opinions outlined are written knowing that they will be interpreted as controversial by some in the market, including some of our competitors, but then again Certus has built its entire business around Oracle Cloud and positively committing to the right direction before everyone else thereby creating our competitive advantage.
So before I continue the story, I would like to make an important point…
….when Certus engages with a Customer for an Oracle Cloud implementation or any other project we have complete empathy and understanding of the sponsoring Executive(s) position within their organisation. Understandably with any IT enabled business change involving new technology such projects are considered to be “high risk” in nature. We are very aware that these individuals often put their career and sometimes their job on the line as they take the role of champion; securing the necessary board level support and funding to undertake these projects with the view of making a significant positive impact to the organisation holistically.
Certus sees its responsibility extends way beyond ensuring a successful “contracted” delivery in that we have a duty of care to these individuals. My own view has always been if these individuals have been brave enough to take that first step then it is very much our responsibility to protect them politically by ensuring we make good on our promises and that the customer organisation can achieve transformation. From our perspective the engagement becomes very “personal” as we strive for customer success.
So now let’s roll the clock forward...
Since we started in 2011 the majority of organisations have been quite happy to sit it out on legacy out dated platforms with the majority even pretending that the Cloud isn’t real and in the knowledge Oracle was going to provide endless support and continued development of the existing platforms. During this time I have heard every argument for not moving to the Cloud - “it’s a fad, it’s not proven, it’s not secure, it doesn’t scale, it doesn’t work, we don’t want to write off what we already have” – when really such negativity was/is an attempt to hold back evolutionary change with organisations having their Ostrich moment with their heads firmly planted in the sand and ignoring the Elephant in the room.
Mark Hurd, Oracle CEO, said in his keynote speech at Oracle Openworld 2015 “The current IT on-premise Operating Model is unstainable. Companies must modernise in the cloud to survive”.
Now my interpretation of Mark Hurd’s message and in accepting the reality that Cloud applications footprint and functionality is accelerating makes Oracle’s legacy on premise systems looking not only older each day but also more critically increasingly becoming irrelevant to modern day business operations.
So to be clear the Elephant in the room is ignoring the fact that “Oracle on-premise systems are legacy and will not be developed any further and ALL true new innovation is ONLY going to take place on the Oracle Cloud platform”.
Last year Certus lost an Oracle Cloud deal to an organisation that said it needed to transform its HR business operational model as the company was losing market share; and one element of their new strategic outlook was to focus on their own people in terms of talent acquisition and development. We lost to a competitors (non-Oracle) archaic on-premise solution and whilst we undertook our usual analysis of what we did wrong in regard to losing, we knew on this occasion the issue was with the prospect – their rationale was just plain wrong.
You can argue we failed to change the prospects perception during the sales process (and perception is reality), however sometimes people just cannot be saved as they don’t want to be. On the procurement debrief I was bold enough to say directly that we would probably see them in 2 years time when their implementation had not achieved what they wanted and that’s if one of their competitors hadn’t taken them out first! Losing to a competitor’s alternative Cloud product is one thing, losing to a legacy on-premise system today is frankly complete nonsense.
On a positive note since 2011 Certus has taken 18 companies and organisations in Financial Services; Local Government; Charity Sector; Engineering; Manufacturing; Transportation; Environmental; Media and even a Sporting Governing Body into the Oracle ERP and HCM Cloud, and have implemented over 70 Cloud modules over 25 different countries. The Cloud is not constrained by industry and crosses all vertical industries.
The entire market has undergone a paradigm shift – please note my tense! All the tier 1 software vendors are now all established in the Cloud as well as a myriad of new entrants from Silicon Valley backed by significant Venture Capitalist and Private Equity money. Even the players that digitally disrupt our consumer lives daily, all of their mobile apps are in the Cloud. Is it early days still? yes, but nowhere near as those pioneering days and Oracle by its own admission was late to the Cloud. Today from an Oracle Cloud perspective the products are now mature and proven.
If you disagree, then I challenge you to just ask one simple question “Where is all the new R&D money being invested? Answer – Cloud”. (Just search Google)
Larry Ellison, Oracle Executive Chairman and CTO at Openworld 2015 “It’s only a matter of time that the majority of computing is done in the cloud and a minority on-premise”.
So in 2015 for the majority of organisations the Elephant is still in the room and it is really time he or she now left! To be absolutely clear with the few obvious known exceptions, you are going to be moving your back office systems to the Cloud whether you like it or not. It’s just a case of when.
Brutal – Yes! but that’s digital disruption for you and it has already happened to the back office. Your existing on-premise platforms are not going to transform your business; they are not going to solve the challenges of the 21st Century when they were built in the 20th – infact all they are just going to do is haemorrhage cash moving forward in becoming even more expensive to maintain and impossible to innovate on, consequently holding you back as an organisation. For some businesses the situation is so critical that they just won’t survive if they don’t embrace Cloud! (and trust me I am not dramatising this). Equally Cloud is not a universal panacea that will solve all your problems however it is THE platform for INNOVATION ENABLEMENT.
So think about this real hard when making strategic decisions? Continue to put the inevitable off by all means, but digital disruption of ERP and HCM gives back competitive advantage through efficient standardised best practice processes; modern ways to engage a workforce and manage your talent ongoing to enable delivery. If you do nothing, be assured your competitors will, especially the new kids on the block that have grown up in the Cloud and know no difference and have absolutely no fear in upsetting the status quo of any given industry.
Controversial – Yes, but in my opinion disrupting technology and markets is supposed to be just that. As for On Premise, the Back Office is Dead – Game Over! Not because Oracle says so but the entire industry as a whole has! Agree or disagree, for me I will see you all in the Cloud in the next 5 years, it’s just of case of when.