Large enterprise customers of Oracle products fail to understand that moving applications to the cloud means a well-known stable and complex business transformation and not just a technical challenge.
The company analyst warned about the unrealistic expectations raised by Big Red’s move of enterprise applications to SaaS. SaaS (Software-as-a-Service) is a form of cloud computing that enables the delivery of a cloud application, along with its underlying platforms and infrastructure, to end users via an internet browser. This solution is particularly suitable for large companies, small structures or individuals who:
- unwilling to purchase or maintain on -premises infrastructure, platforms and software;
- prefer simpler management of costs through operating costs (OpEx), rather than capital expenditure (CapEx);
- encounter relatively common problems;
- in favor of subscription models for software.
According to Gartner, although Oracle Cloud Software (OCA) products are getting older, customers still don’t understand what it really means to move their applications on -premises. Companies that pass the OCA don’t understand that SaaS doesn’t allow customization, just configuration. The move to OCA is a business change, not a technical move, warns in a Gartner review paper.
This message has already been directed to SAP enterprise software customers who are also facing the transition to the cloud. Oliver Betz, SVP responsible for SAP S/4HANA product management, told prospects that in 2020, the transition to software as a service will not allow them to make the same changes as on -premises world. That’s not how the cloud works, he says.
How the SaaS solution works
The SaaS model helps reduce initial costs by eliminating the need to purchase software or invest in robust on-premise IT infrastructure, as is the case with traditional software. However, SaaS customers should invest in fast network hardware, because service performance is determined by Internet speed.
SaaS software includes several application service providers such as Google Docs and Microsoft Office 365, as well as enterprise services that provide human resource management software, e-commerce systems, customer relationship management and integrated development environments. Software vendors typically choose one or both of two common deployment models:
- in their own data center;
- through a public cloud service provider (e.g. AWS, Azure or IBM Cloud) that takes care of managing the cloud environment in which the SaaS solution is hosted.
SaaS applications take advantage of a multi-tenant architecture to isolate customer data. The vendor handles software upgrades, patching, and other general maintenance tasks, while users interact with the software through a web browser. SaaS solutions are typically fully functional, but sometimes include custom integration via application programming interfaces (APIs), such as REST or SOAP, to connect other functions.
It is easier for a SaaS provider to deploy new functions to its customers. In fact, most SaaS applications are ready-to-use configured products; the supplier manages all the elements on which the application relies, especially:
- hardware components, such as for networking, storage, and data center servers;
- platforms, especially for virtualization, operating systems and middleware;
- the software configuration, including the runtime environment, data, and the application itself.
- The SaaS model
SaaS applications are often based on subscription models. Unlike a perpetual license, this software distribution model links each account to a subscription that guarantees access to SaaS for a fixed period of time, usually on an annual or monthly basis. The subscription usually includes access to product documentation and ongoing technical support (under a service level agreement), but some SaaS solution providers charge an additional support fee to customize the source code. .
According to Gartner, Oracle users thinking of migrating to the cloud are faced with a problem of unrealistic expectations raised by the migration of Big Red enterprise applications to SaaS. However, assistance will soon be in the form of corporate consultants taking on work on OCA transfers. According to Gartner, service providers generated $ 15.4 billion in revenue from OCA -related services.
By the end of 2024, 75% of Oracle’s application services revenue will be cloud computing, where large businesses practice cloud computing, according to the analyst. On the same date, 70% of large Oracle ERP deployments will be carried out by primary remote rather than on -site implementation teams. Publishers offer a variety of SaaS software, from basic business applications to complex ERP suites, to meet all customer needs. Below are some examples of SaaS companies and products:
- enterprise resource planning software from SAP;
- paychex human resources software;
- software for businesses from CA Technologies;
- SaaS messaging solution from Atos;
- customer relationship management (CRM) software from Salesforce;
- Slack messaging service;
- Microsoft Office 365;
- Dropbox file storage service.
Of Oracle applications implemented as SaaS, 60% are related to human resources or enterprise resource planning. One in ten apps is associated with advertising and customer experience, while 15% are associated with supply chain apps. The remaining 15% is in the new area of industrial applications.
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