Oracle’s New SCM Cloud Services Solution

By: Steve Banker, Contributer

Forbes, 08/21/2014

Oracle ORCL -0.21% announced at the Oracle Transportation Management (OTM) Special Interest Group last week, that beginning in September, customers can purchase a Cloud Services version of OTM and Global Trade Management (GTM).  This week I, and my supply chain colleagues at ARC, got briefed on the new offering.  Their cloud solution set involves Software as a Service (SaaS) pricing, hosting of the solution by Oracle, patching, and a controlled upgrade process.

Oracle has been actively pushing into Cloud-based SaaS.  When their fourth quarter results were announced on June 27th, Oracle reported that Cloud SaaS and platform-as-a-service (PaaS) revenues were up 25% to $322 million.  Oracle already offers Cloud SaaS for human resources, enterprise resource planning, enterprise performance management (financials), and customer experience (customer relationship management).

While Oracle has offered hosting solutions for transportation management systems (TMS) and GTM in the past, and partners have offered OTM/GTM in a SaaS model, this is Oracle’s first Cloud SaaS offering in logistics.  The difference is that in Oracle’s hosting solution, the customer owned the software, they chose when or if they would upgrade.  Cloud SaaS is subscription-based and offers controlled upgrades.

Oracle will also continue to sell OTM and GTM as on premise, licensed solution.  And in fact, both solutions are the same; Oracle’s cloud solution is not a “dumbed down” version of their traditional licensed solution.

A public cloud solution is a piece of software code used by multiple customers.  Google Maps would be an example.  It is the same code that many users from many companies are using. Enterprise software solutions can also have this architecture, although different customers do have configuration options, can give the solution there own look and feel, and their data is segregated from other customers.  A private cloud solution is a solution that is hosted but one in which each customer has their own version of the software.

English: Diagram showing three main types of c...English: Diagram showing three main types of cloud computing (public/external, hybrid, private/internal) (Photo credit: Wikipedia)

So how does Oracle plan to mimic the speed to value proposition of public cloud providers with a private cloud offering?  Both Oracle, and their Cloud TMS/GTM partners are offering a templated solution. In other words, much of the solution – user roles, menu options, reports, planning parameters – have already been preconfigured.

If customers want something that is not part of the predefined solution, OTM is a very rich solution and they can very likely configure the solution to fit their needs, but they will have to expect the implementation to take longer than 10 weeks. Further, in order to insure a smooth upgrade path, no customization (for example, extra database columns) will be allowed.

The templates offered by partners and Oracle will not all be the same.  Different partners have domain expertise in different industries and application areas (GTM vs. TMS).  But Oracle is demanding of all their partners that they be able to deliver within 8-10 weeks; those that wish to be cloud partners have their offerings reviewed by Oracle to insure that Oracle’s time to value criteria are being met.

Network-based cloud solutions are particularly valuable in TMS because of the collaborative nature of the process.  If shippers want to add new carriers, and the carrier is part of the network, the onboarding process is much easier.  Oracle is offering the broadest set of carrier connectivity network partners in TMS.  Their partners include their traditional connectivity partner, E2open EOPN -0.03%, as well as SPS Commerce SPSC -0.62%, Sterling Commerce, and Transporeon.

Similarly, on the GTM side, there is great value in a cloud solution because trade content change all the time.  Instead of users continually having to stay on top of these content changes and making sure the changes get entered into the GTM solution, Oracle’s trade content partner – CustomsInfo – stay on top of the changes, format the data into the Oracle GTM schema, then the Oracle services organization makes the changes in customer GTM solutions and the end users are alerted to those content changes on a daily basis via email.

Oracle has traditionally sold TMS and GTM to large organizations, companies with revenues of over $500 million. They are hoping that this offering will allow them to sell more successfully to smaller companies.  But I suspect that Oracle will also find new customers among their existing installed base among customers who are several upgrades behind or who have customized their solution.





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