Special Report: Cold Fusion for Oracle?

A reshuffle at Oracle has created concerns about the future of the firm's ambitious Fusion project - and rampant debate over the future direction of the company's applications business.

By Stuart Lauchlan, news and analysis editor

With only weeks to go until the Oracle OpenWorld jamboree in San Francisco, the man in charge of the firm’s ambitious Fusion project is no longer at the helm, sparking speculation about the future direction of Oracle’s applications business.

John Wookey, responsible for leading Fusion development, has resigned, with the scuttlebutt in Silicon Valley talking in terms of "divergent strategic visions" between him and CEO Larry Ellison. These are unconfirmed rumours, but there is a long line of senior Oracle execs who walked out the front door after falling out of favour with the Ellison view of the world. Oracle alumni include Tom Siebel, Craig Conway and Ray Lane.

Thomas Kurian, senior vice president for Oracle's Fusion Middleware group, will now assume responsibility for Fusion Applications development and report to Chuck Rozwat, Oracle's executive vice president. Ed Abbo, who previously reported to Wookey, will continue to lead Oracle's Applications Unlimited programme, also reporting directly to Rozwat. Rozwat will now have responsibility for all application and database development and will be the single direct report to Ellison.

If there has been a parting of the ways based on differing visions, what might the trigger have been? There have been divergences in the way different Oracle execs have talked about Fusion. When Ellison talks about the Fusion generation, it’s a revolution with great emphasis on the newness of some of the features; Wookey on the other hand played the evolution card, emphasising the idea of leveraging existing investments, more of an upgrade for customers than a reboot.

It could be down to timing. The Fusion suite was due out of the Redwood Shores starting blocks sometime next year with a formal announcement of a shipping date expected in some quarters at the OpenWorld gig. But following Wookey’s departures, the talk now is of a holding statement at the show with a 2009 launch date now looking more credible. Another theory is that parts of the suite will still appear next year, but not until around this time, allowing Oracle to claim it is still on track.

It’s also worth noting that whatever the problem is, it’s not serious enough for Wookey to quit at once. Although there were initial rumours that he had decided to walk immediately in the wake of a heated row with Ellison, it now seems that he will be remaining on at Oracle in some capacity for a few months yet in order to ensure a smooth handover to the new heirarchy.

All eyes will now be on the OpenWorld conference to see what reassuring noises come out of the company. The event was already expected to be dominated by the increasingly hostile takeover bid for BEA Systems, the pursuit of which is likely to leave most Oracle senior management cautiously tight-lipped on most subjects for fear of upsetting any investor apple carts. Now Oracle bosses will have to make placating noises in the direction of the applications user base in order to calm any nerves about when the new generation of apps will appear.

Genuine questions

Analyst firm Gartner Group believes Wookey’s departure does raise genuine questions that need to be answered. “Wookey's visible leadership position and applications experience instilled confidence in Oracle's application strategy with customers and prospects,” says Gartner's Yvonne Genovese. “Although Kurian is respected for his technical knowledge and leadership of Oracle's middleware unit, his direct experience with business applications is more limited.

“This change comes amid market rumours of a delay in Fusion Applications. Will there be a delay in the delivery of Fusion Applications? Oracle stated to Gartner in a discussion on Wookey’s departure that there in fact would be no delay in Fusion Applications scheduled for 2008. We don't think there will be a delay in delivery, but Oracle has left enough room in its communications for a change in the breadth and depth of the initial release.

“Is there management disagreement regarding strategies for ongoing development and deployment of Fusion Applications? One view looks at Fusion Applications as being new and innovative while another takes a conservative approach to leverage Oracle E-Business Suite and Siebel products. Oracle stated in our conversation after the management change that the bulk of Fusion Applications will be new. This has meaning for the installed base because Oracle’s upgrade language will likely mean significant investments to move to the Fusion Applications for all installed-base users.

“While we believe there may be some delays in subsets of Fusion Applications in 2008, based on these recent conversations the Fusion strategy has emerged as a new application for all Oracle business applications users (as opposed to an upgrade) that will be released in phases. In the short-term, we expect Oracle to prioritise the release of Fusion Applications to start with those that can be integrated with Oracle Fusion Middleware and supported by a coexistence strategy.”

But is it an upgrade or a new start for existing customers? “Will there be a change from Fusion Applications being a full-suite replacement to a coexistence strategy where Fusion Applications will become another product line integrated with installed applications via middleware?” says Genovese. “In conversations following the management change, Oracle stated that this was in fact the strategy – the first time Oracle has publicly said so. Although users may like this strategy, it will take many customers years to realise a full-suite service-oriented-architecture-based set of applications. In the meantime, Oracle's commitment to its Applications Unlimited plan and its Applications Integration Architecture (AIA) platform will likely remain intact.”

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