Are Oracle’s Continuous Updates Worth It?
As pointed out in the previous articles in this series, with its continuous innovation model, Oracle is asking customers to commit to a road map of updates through 2030, rather than ever having to upgrade again. These updates will arrive, at a minimum, on an annual basis, with updates for some applications coming even more frequently.
This stream of updates creates pressure to keep up for a few reasons, such as:
- To access the latest fixes and maintenance updates
- To apply the latest tax, legal & regulatory updates
- To see if there any new features of value worth applying
All of this again begs the question, if you’re not applying the updates consistently, including taking advantage of features, are you really getting value for your time and money?
The reality for many is that once they try the continuous innovation model, they struggle to keep pace with adoption.
Further, adopting this model means companies have to believe that Oracle is truly “continuously innovating” their ERP software and other applications as promised. Given the time it will take companies to maintain the pace of the updates, businesses must ask themselves whether the budget, time, and resources devoted to this program are worthwhile compared to devoting those funds and people to another business imperative. Few IT organizations have copious amounts of spare time and resources—so following Oracle’s continuous release road map has an opportunity cost.
Companies have to go into their relationship with Oracle’s new model with their eyes wide open. It’s therefore worth exploring whether the opportunity costs involved with the cycle of updates make sense for most companies.
The New Responsibilities for Companies with the Continuous Innovation Model
As part of Oracle’s continuous innovation releases, customers have some new responsibilities:
- First, they must upgrade to the version supported for continuous innovation.
- Second, they are encouraged to have teams and infrastructure in place to test, validate, and apply the updates as well as to govern the overall process.
- Third, at a minimum, they must keep up with the updates required to maintain support.
Now, updates are perceived by many as less painful than the larger upgrade implementations of the past. But are customers simply exchanging one major project every three to five years for several smaller projects every year? There’s simply no getting around the fact that implementing the updates will take a lot of IT’s time—time that could be spent on other projects. The cost of those resources should not be minimized.
Further, those costs and resources come on top of the 20% fee they’re paying Oracle to get the updates. Paying the fee makes sense only if companies are going to apply the updates, but at the same time, every update comes with additional resource-based costs on top of the fee. Taken together, companies must recognize the full price tag of the continuous innovation model.
Additionally, companies will also be tasked with ensuring that users are trained on the software every time an update comes along—for applications with monthly updates, this could mean near constant training and retraining for staff.
Like New Year’s resolutions, companies may start off with the best of intentions with their Oracle updates, fully planning to implement every update that comes out. But after a while, they may end up not applying the updates, which then means that their 20% fee is going to waste. Oracle is thus putting customers in a bind—either accept the updates and the additional opportunity costs that come with them or pay a fee for updates that aren’t being used. Companies should assess whether they can truly keep up with the updates before adopting the continuous innovation model.
Is Oracle the Innovator or Are You?
Ultimately, to get the most out of the software updates, companies are going to have to engage in a lot of innovation on their own. So far, Oracle hasn’t delivered on the promise of continuous innovation in their updates. Rimini Street, for example, analyzes Oracle’s continuous release updates for EBS and PeopleSoft using a proprietary model to analyze four aspects of every update. They have found that a significant amount of the supposed innovation contained in the updates falls into one of four categories:
- Tax, legal, or regulatory updates
- Minor features
- Major enhancements
- Things customers could do themselves with software they already own from Oracle
While the major enhancements would appeal to any customer, the other three categories are less appealing, and that is generally where the innovations have landed so far. Rimini Street analyzed PeopleSoft updates from 2013 to 2018 and found that 800 updates were released during that time frame, which comes to an average of about 160 per year. When customers were polled at the 2019 PeopleSoft Reconnect 2019 event, 82% of PeopleSoft customers said they applied three new capabilities or fewer per year. Companies are paying for updates they’re not even using.
One of the main PeopleSoft enhancements that customers associate with continuous innovation is Fluid Pages. However, the Fluid Pages tool came out in 2014, and using it, customers can develop their own custom Fluid Pages. What is being delivered with updates is mostly content for those pages, but the customer does the work, putting the burden of innovation on the business. In essence, then, customers are being asked to pay a 20% annual fee to do innovation on their own. While Fluid Pages are genuinely beneficial, the question is whether they are worth the expense—especially when companies consider where else the funding could be used.
This level of critical thinking should not be reserved for the road map of Oracle software. Companies have priorities aside from Oracle ERP, such as deploying new digital transformation initiatives or adopting third-party SaaS applications. This should all be put in context when evaluating whether the value they’re getting for maintaining, supporting, and applying these updates is worthwhile.
Companies need to have a moment of clarity and truly assess whether they’re going to keep up with the cycle of updates with this model. If not, the opportunity cost and software fees might simply be better spent elsewhere.