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Gartner report suggests that many Oracle customers have been wrongly told their on-premises ERP suites are at the end-of-life stage

Gartner report suggests that many Oracle customers have been wrongly told their on-premises ERP suites are at the end-of-life stage

What’s the future for Oracle’s on-premise E-Business Suite? Should you be starting to think about transitioning across to Oracle Cloud Applications? What solution would best suit your business?

If you’re an Oracle ERP customer, these are all questions you’ll be familiar with. As luck would have it, research and advisory firm Gartner has provided some answers to them in a paper called ‘What Oracle ERP Customers Need to Know About Oracle Cloud Applications’.

Here are some of the key findings and recommendations from the paper:

The death of on-premise ERP has been greatly exaggerated

In its interactions with clients, Gartner said that it has noticed how lots of Oracle customers believe that their on-premises ERP suites are at the end-of-life stage and that they must move to the cloud now.

The paper is quick to shoot down such reports, pointing out that Oracle receives the majority of its software license revenue from customers paying for maintenance of, and new sales of, its on-premises products.

Oracle still gets nearly two-thirds (65%) of its software license revenue from on-premises products – a figure that remains relatively flat, having dropped only a few percentile (-3%) since 2016. “Oracle does not want to jeopardize this revenue stream,” the report states.

Oracle Cloud Applications are the future

While Oracle’s on-premise products are not going to be forgotten about anytime soon (Oracle has committed to support EBS until 2030 at least) – with the company taking steps to ensure that they have a funded and maintained roadmap – cloud applications will slowly become Oracle’s priority.

Gartner notes that Oracle Cloud Applications is already consuming a large part of the $5 billion spent by the company on research and development (R&D) each year.

“Oracle has spent over 10 years creating its cloud application product line from the ground up. The result is a solution with a more modern architecture than products developed 20 years ago,” the report states.

Let your business needs guide your next move

Many of Oracle’s administrative ERP customers — those using human capital management (HCM), financial and basic procurement functions — are already in the process of moving to the cloud, according to Gartner.

However, the firm advises against simply following the trend, urging businesses to be led instead by their own individual requirements:

“Compare your business requirements to the maturity and functional depth of Oracle Cloud Applications and to Oracle’s roadmaps for them. Don’t assume that a “cloud first” sourcing policy eliminates the need for a business justification for business applications.”

When upgrading, don’t disregard your current solution

If your current solution is coming up short, that doesn’t always mean that you need to invest in an entirely new system.

“Avoid confusing the sourcing of new technology with the fulfilment of business requirements. A full “rip and replace” of your current applications may not be your best option,” Gartner warns.

Upgrading or optimising your current solution might provide greater business value than transitioning to the cloud at this point. It would mean considerably less upheaval for your organisation, too, with Gartner noting that Oracle Cloud Applications “are not like-for-like replacements for Oracle’s on-premises suites”.

To discuss the best route to take with your Oracle’s on-premises ERP suite, contact e-Resolve today.

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