Reasons Why and What’s Holding Others Back
With each new year, it’s fun to watch the predictions for the coming year as it appears that every publication and tech analyst firm, large and small, seem to bring out the crystal ball and gaze into the future. So, I thought that I’d try getting into the act with making a bold prediction that more and more organizations will move their legacy Oracle Applications off-premise to cloud (IaaS public, private). Perhaps, after digging a bit deeper, the prediction will not be viewed as bold as it might first appear.
First Law of Motion: Legacy Applications Not Being Displaced (Quickly)
Without question, organizations are choosing SaaS-based applications for any new requirement. Inevitably, SaaS is planned as the eventual replacement of the current portfolio of legacy enterprise applications as indicated by virtually every survey and forecast. However, for most, it will take some time before their legacy Oracle Applications are retired or replaced. The reasons vary but are centered primarily around cost, complexity and risk.
There’s an awful lot of inertia to overcome. You remember inertia (Newton’s first law of motion) from physics class, don’t you? Inertia is the tendency of an object to remain at rest unless acted upon by an external force. Your legacy Oracle Applications are certainly a large mass at the center of the business. For most of you, the inertia is extremely high – especially with significant, sunk cost of highly customized applications surrounded by critical integrations to 3rd party systems and no clear alternative to cover all of your required functionality and business rules. The compelling force is just not enough when there are many other priorities to tackle. The bottom line is that the mantra ‘if it ain’t broke then don’t fix it’ seems to apply when it comes to legacy Oracle Applications.
Trends, Customer Survey and Driving Force: Legacy to the Cloud
What are organizations doing with their Oracle Applications if they are not ready for SaaS? For some, they will leave the applications right where they are today, either on-premise or in a co-location hosting facility.
So, what’s driving my prediction of the move to cloud (IaaS public, private)? First and foremost, empirical evidence continues to grow as customers are asking more questions and taking action. Over the past six years, I have witnessed the successful completion of over 80 Oracle workload migrations to Amazon Web Services (AWS) including 43 enterprise ERP applications. In the last 5 weeks of 2018, 3 new customers have signed on for our #OracleOnAWS services to migrate their Oracle Applications. Momentum is building and the trend is increasing!
Why? The answer is simple. It’s well known that cloud is and will continue to be highly disruptive. The cost of running traditional IT infrastructure in captive data centers or traditional hosted infrastructure is expensive (hardware, software, power, staff) and inflexible when compared to cloud.
Research and industry analyst reports provide insight to market trends, forecasts and customer surveys that support the thesis. The forecast for cloud in all forms remains bullish. Refer to my blog “Are Your Oracle Applications Headed for Retirement (Soon)?” for insight into related cloud trends. Executives and IT leadership recognize the value of cloud and want (need) to take advantage of the benefits and ROI.
According to a recent study by 451 Research1, from 2018 to 2020 (less than 2 years), there will be a 19% decrease in Oracle enterprise software running on in-house / internal infrastructure. The shift will primarily be from on-premise traditional infrastructure to 3rd party IaaS such as AWS, Oracle offerings (SaaS or IaaS) or hosted private cloud. The forecast (and, hence, the prediction) – companies are committed to get out of the data center and to the cloud. Enterprise Oracle applications will not be an exception to this phenomenon. It’s not a matter of “if” but when and how (i.e. what form of cloud).
The Hurdles, Fears and Myths (Top Reasons Why Companies Are Slow to Adopt)
So, what’s holding some companies back from migrating their legacy Oracle Applications to public or private cloud if they are not yet ready for SaaS? I’ve already mentioned the inherent inertia behind status quo. It is a matter of time when adoption of legacy-to-cloud strategy becomes delineated between the leaders and laggards.
Often, the underlying reason for not making a move is that the value and benefits vs the risk have not been clearly articulated. In fact, there is a lot of misleading and inaccurate information being circulated that is causing organizations to hesitate or to steer in the wrong direction.
The following list is a synopsis of the common themes of why organizations are hesitant or not seriously considering moving their legacy Oracle Applications to cloud (IaaS public, private) or believe that there are limited paths that can be followed in order to minimize risk.
Most Prevalent Challenges/Obstacles (Perceived / Real?)
- 1. Complexity and Cost
- Cost (high?) vs benefit (low?) or minimal cost savings
- Never been done before to non-Oracle target platform
- Does not support enterprise level needs (e.g. Oracle RAC, hybrid, etc.)
- Cost is higher in non-Oracle cloud
- 2. License, Support and Risk
- License compliance
- Non-Oracle public cloud is not certified and Oracle will no longer support
- Only Oracle cloud infrastructure can be used
- 3. Security
- How can I ensure security in a shared responsibility model?
- Cloud is not as secure as current environment
All of the above cited hurdles and roadblocks are erroneous or misrepresentative in some way. Refer to the on-demand webinar links below for additional insight. I’m also planning future blog and social media posts on the subject of the “myths of moving legacy Oracle Applications to cloud” so stayed tuned.
Working with our customers and a set of leading 3rd party providers (AWS, Alert Logic, VMware), Apps Associates has built an effective strategy to address each of these areas of concerns and the perceived risk across security, cost management, license compliance and governance. Our managed service solution bundles products, tools and services along with deep experience of Oracle Applications into a single service platform allowing you to focus on innovation of your business.
Reference: Apps Associates Webinar Series (#OracleOnAWS)
Customers are moving to cloud, gaining cost saving and reaping benefits. There is no reason that you can’t do so successfully. For each of the challenges and fears, there are answers and insights available. It’s important to begin with an objective assessment built on facts and actual data from your organization.
For your research, start with our recent webinar series, available on demand:
- Migrating Oracle Applications to AWS
- Featuring “voice of customer” Sr Dir of ERP/IT, Integer Holdings Corp (NYSE: ITGR)
- 10 Licensing and Support Mistakes to Avoid When Migrating Oracle to AWS
- Featuring independent License Compliance & Audit advisory firm, Miro Consulting
- Running Enterprise Workloads on AWS Cloud
- Featuring VMware Cloud Solution Engineer, Jason Crandall
- How to Secure Your Oracle Workloads on AWS
- Featuring Alert Logic Senior Solutions Engineer, Marija Strazdas
Oracle and related products (e.g., E-Business Suite) are registered trademarks of Oracle Corporation and/or its affiliates.
Amazon Web Services (“AWS”) and related products and services are registered trademarks of Amazon.com, Inc. and/or its affiliates.
Reference articles, statements and related, linked URLs are subject to change by the source author without notice.
1Voice of the Enterprise: Cloud, Hosting and Managed Services, Workloads and Key Projects – Quarterly Advisory Report. Source: 451 Research’s Voice of the Enterprise: Cloud Hosting & Managed Services, Workloads and Key Projects, 2018; Liam Eagle, Research Manager.
Bill Saltys is Senior Vice President, Alliances. Bill is responsible to drive the strategic direction of a cross-functional program across Apps Associates focused on customer value through alliances with industry leaders that will enable cloud adoption, transformation and managed services. Prior to joining Apps Associates, Bill held executive and senior management positions within the high technology sector in both entrepreneurial firms and Fortune 500 companies such as Texas Instruments and Digital Equipment Corporation in the areas of strategic planning & engineering.