Summary
Oracle seems ready to dive into the social networking business. Collaboration is one of the big directions major IT vendors are taking today. Oracle has some experience in this area already, and seems ready to make a deep commitment. A product of this type would fit perfectly with the upcoming Fusion Applications.
Analysis
Social networking has been one of the hottest technology area in recent years, both among consumers and business. The success of consumer-oriented social networking sites is well documented, and the premiere business-oriented social networking site, Linkedin, has also been doing quite well. Many companies are now heavily using Instant Messaging (IM), but other aspects of social networking have been slow to catch on. Both Microsoft and Cisco are focusing heavily on collaboration in their latest enterprise tools. Collaboration and social networking, while not exactly the same, overlap and may start to merge as both areas mature.
Social networking (beyond IM) has not caught on in enterprises, but that is likely to change in the next few years. Younger employees already use and depend on social networking to perform their day-to-day tasks. While that approach seems alien and perhaps even frivolous to many older workers, it is normal for most younger workers and over time will become an accepted business practice. After all, it hasn’t been that long ago that email was also considered alien, but today it’s an integral part of doing business.
Oracle has made a practice of staying on the cutting edge of new technology. Sometimes this has worked well for them and sometimes not so well. They were ahead of their competitors in moving their applications to Web based, which gained market share for them. On the other hand, there was also the Network Computer in the late Nineties that didn’t do so well. In general, however, Oracle has been good at foreseeing the next coming thing and getting on board. Social networking may well fit into this category for them.
Assuming Oracle does offer the “Social Suite” as a product sometime soon, it’s not clear how well it will do in the marketplace. Not many business leaders today value the social tools included in this suite, so won’t be willing to pay much to get it. In today’s harsh economic climate it’s hard to see any sales at all for it, which may be one factor in why Oracle is downplaying it now.
The real potential for Social Suite, however, comes with the release of Fusion Applications. This is Oracle’s new applications suite allegedly containing the best from PeopleSoft, Siebel and Oracle’s own eBusiness Suite, all merged and updated to form a state-of-the-art applications product. There is clearly a business case for a product of this nature, since eBusiness Suite, for example, is notorious for having a user interface difficult to navigate. The key challenge for Oracle is to maintain deep functionality while still providing a simple, easy-to-use interface. If they can achieve this they’ll have leapfrogged their competition.
One key aspect of Fusion Applications is the increased utilization of collaboration and social networking tools embedded within the product. A heavy use of Web 2.0 concepts will make the applications easier to use and more functional. It’s easy to see how the Social Suite could fit integrally into Fusion Applications to provide an enhanced level of collaboration within the applications. If packaged this way, businesses would buy it, since its usefulness would be readily apparent.
