November 28, 2018 - Are Your Legacy Oracle Applications Headed to Retirement (Soon)?

Experts Say ‘No’. So, What Does It Mean for You?

There is an incredible, almost insatiable, appetite for cloud in all forms. It’s nearly impossible to escape the ongoing onslaught of articles, digital media, social posts, analyst forecasts and earnings reports covering the continuing acceleration to cloud. Public, private and hybrid cloud…everything cloud computing!

Forecast Summary

According to Gartner Inc.1, “The worldwide public cloud services market is projected to grow 21.4 percent in 2018 to total $186.4 billion, up from $153.5 billion in 2017. The fastest-growing segment of the market is cloud system infrastructure services (infrastructure as a service or IaaS), which is forecast to grow 35.9 percent in 2018 to reach $40.8 billion.”

“Software as a service (SaaS) remains the largest segment of the cloud market, with revenue expected to grow 22.2 percent to reach $73.6 billion in 2018. Gartner expects SaaS to reach 45 percent of total application software spending by 2021.” No matter which way that you slice it, the projected growth of public cloud is tremendous. At the same time, as depicted in the chart below, Gartner predicts that it will be a long, slow process for a significant segment of the portfolio as massive spending will persist for non-cloud, legacy IT.

noncloud-vs-cloud-marketing

David Cappuccio, Research VP at Gartner, authored a recent research report and recapped in his blog titled “The Data Center is Dead”. The intent is to highlight the shift from internal, on-premise data centers as noted in the following excerpt points:

  • “By 2025, 80% of enterprises will have shut down their (internal) data centers, versus 10% today.”
  • “Workload placement in a digital infrastructure is based on business need, not constrained by physical location…. I&O leaders must build an ecosystem of service partners to help enable scalable, agile infrastructures.

infrastructure

The forecasts may, on the surface, appear to be conflicting, if not contradictory. In fact, that is not the case as displacement of legacy infrastructure is occurring at a rapid pace. But, in doing so, rationalization of the upper layers of the stack (e.g. applications, databases) is required in order to ensure that the proverbial ‘baby is not thrown out with the bath water’.

What About Your Legacy Oracle Applications?

So, what does this mean for your aging footprint of legacy Oracle Application software? Such applications include a plethora of software used to run your business operations on a day-to-day basis such as Oracle E-Business Suite, Peoplesoft, JD Edwards, etc. The answer is that most organizations are probably not planning any significant change of this legacy software in the immediate future.

One of the driving forces behind this phenomenon is that organizations have invested heavily in their legacy software over many years by customizing or shaping it to meet their business needs. That software continues to meet critical business requirements and it will not be easily replaced anytime soon. Secondly, Oracle has committed to provide Premier Support for many years into the future, e.g. E-Business Suite v12.2 roadmap continues support through 2030.

Moving Forward with Cloud Transformation

Even if legacy applications will be around for a long time, most companies are not standing still in the transformation to cloud. Applications are driving internal and customer-facing value to the business while infrastructure is increasingly commoditized and utility-based. In a recent RightScale 2018 State of the Cloud survey, 96% of respondents are using cloud (92% public cloud, 75% private cloud, 71% hybrid combination of public and private).

A growing number of our legacy Oracle Application customers have made the move to IaaS leveraging Amazon Web Services (AWS) in order to realize the benefits inherent with on demand, utility-based public cloud as well as to leverage AWS maturity and breadth of services. For additional insight, listen to customer experience and resulting operational gains, including > 50% cost reduction, at Integer Holdings Corp (NYSE: ITGR) cited during excerpts of a recent session, “Migrating Oracle Applications to AWS Cloud”.

Planning the Roadmap for Your Legacy Applications Is the Key

Just because your legacy Oracle Applications are not headed towards retirement any time soon, it is important that you do not remain complacent in accepting status quo and fail to deliver on improved operating performance. Of course, in doing so, you must ensure positive outcome and control factors such as security, cost management and governance. Build the business case… one way or the other. Get started with Cloud Assessment Services and rationalization of your portfolio in terms of platform, cost, licensing and phasing to SaaS where and when it makes sense. Planning and experience are key ingredients for your legacy Oracle environment.

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.

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Bill Saltys

Bill Saltys is Senior Vice President, Amazon Web Services (AWS) Program Management. Bill is responsible to drive the strategic direction of a cross-functional program across Apps Associates focused on customer value through AWS 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.

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