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I was recently at Oracle Analyst World which is the vendor’s annual gathering of technology industry analysts. Its executives and others in the products organization deliver the latest news on where the titan is focusing efforts to expand its technology and markets. This year, against the background of the consumer and business markets embracing mobile and cloud computing, Oracle is working to sound like a more friendly supplier that can help remove legacy issues and inefficiencies that plague CIOs and data centers. Oracle also used this forum to attract IT departments to the technology advances it has made across its deep and broad portfolio of products. Oracle has more than 3,900 software products and more than 3,000 software patents that indicate its significant investment in R&D. Now the company is beginning to release improved products more frequently, which most customers now expect from technology vendors.
To analysts Oracle emphasized four enterprise imperatives: big data, cloud computing, mobility and social media. These are among the six technology innovations our firm tracks – Oracle does not prioritize advancements in the other two at the top level, business and social collaboration and business analytics, although it offers products for them and are part of its significantly large product portfolio. There was significant time spent discussing their engineered systems of server, software and storage technology, which are targeted to transform data centers. This is a big-money center of opportunity for Oracle as IT organizations strive to streamline data processing and be more cost-effective in operations. Oracle also is furthering vertical integration of its technologies. Speakers invoked analogies to Steve Jobs and the innovative efforts of Apple, but that is really not a relevant comparison, as the dynamics of consumer markets do not translate to the business aspect of technology, whether it is rented by business units or purchased and installed by IT and are not as easily convinced about vertically integrated technology for business. The two constituents of business and IT and their approach to software continues to evolving differently, as I recently assessed. But even so my analysis of Oracle’s imperatives comes in the context of simplifying IT while pushing innovation.
Let’s look first at big data, a market that continues to grow across the spectrum of technology used to capture, store and access business information. Our benchmark research on the topic finds that the RDBMS has reached a saturation point, being used in 80 percent of organizations, while other technologies have smaller penetration but will grow significantly until the end of 2015: in-memory databases (22%), Hadoop (20%) and data warehouse appliances (19%) all will be deployed in that time. Our research shows that the expanding volume, velocity and variety of data are important across types of big data technology, and Oracle is investing to ensure that IT organizations see it as a viable option for all of them. Oracle is embracing Hadoop broadly, from loading to data services, to ensure it can utilize the HCatalog metadata and Hive-based methods in its business intelligence efforts. The latest Oracle Big Data Appliance, Oracle Exadata and Oracle Exalytics, which include its BI software, are designed to serve organizations that have limited resources and time to fine-tune their configuration. In my analysis Oracle has not been as aggressive as it could be on communicating the value of big data and now in conjunction with its acquisition of Endeca is beginning to focus on what we call information optimization, which ultimately is the value derived from big data, as I have pointed out.
I also think Oracle should look at more tightly coupling big data
with its business intelligence and analytics to help business analysts in using large amounts of data. For example, the largest needs for big data according to our research are what-if analysis and forecasting (44%), predictive analytics (41%) and visualization (37%). Oracle has products for all of these, but they should be part of a more integrated presentation and technology stack for organizations to use them more easily.
In both big data and business analytics overall, where Oracle has a broad portfolio of products, its acquisition of Endeca shows real promise, achieving advances in information discovery, interactivity and visualization as well as self-service access to information. Oracle is working to make its BI products as appealing to the business side as they have been to IT organizations but still needs to make clear the value to analysts, let alone those in managerial or management roles. In this area improvements in the user experience are critical: According to our benchmark research usability is the top priority for organizations evaluating new software.
My colleague Tony Cosentino recently covered Oracle’s latest release of business intelligence. He notes that it shows steps in the right direction but lacks integration or use of Oracle’s latest mobile and collaboration technology. Here the company cannot rely on the perspective of IT, which does not consider these aspects important; our business technology innovation research shows that the lines of business have them as two of the top three priorities. Not much is new in the mobile aspects of Oracle BI, although I pointed out at the beginning of last year that it needed significant improvement and requires more frequent updates.
Oracle also is slow in advancing its analytic applications across ERP, CRM, EPM for finance and industry-specific analytics; users in these areas need to transition from tools and dashboards of charts to applications that help not just measure performance but act on and manage it more effectively. Oracle has decided to concentrate its more advanced analytics and visualization on operating against the Oracle Exalytics appliance. This limited approach could hinder its potential as business analysts are less interested in having an appliance package than in tools and software they can use for business analytics with big data or not.
For cloud computing, Oracle is beginning to see returns on its investments in a range of engineered systems that can operate across private or public clouds in single or multitenant approaches; the approach also encompasses storage through archiving data to its Oracle Virtual Networking. Along with IBM, followed by HP and Dell, Oracle is working to turn its range of software into a competitive advantage and appeal to a growing population in IT that realizes it must emphasize usability of technology to meet the next round of business on a more timely and continuous basis.
In the realm of business applications, Oracle is working to 
support them in whatever combinations users want, even in a single organization. It has made its global data centers available for any level of demand on a 24-by-seven basis. With the acquisitions of RightNow and Eloqua it has become relevant in customer services and marketing applications. Oracle’s intention is to supercharge its efforts in the B2C markets and to provide more choices for customers. It has continued development of its Social Relationship Management and utilization of social media but but hasn’t caught up with point providers Attensity, Clarabridge and Kana. I believe Oracle will also need to address multichannel contact centers and the dynamic aspects of customer interactions. Mobile and social channels are driving a new generation of technology that Oracle is not now competitive with. At the analyst gathering I heard almost no references to its efforts in sales force automation and other sales-related tools where Salesforce is sharply focused and Microsoft is rapidly advancing. In our 2012 Value Index on Sales Applications Oracle showed a very competitive offering and earned a tie at the top spot, but it cannot afford to be complacent here. In fact Oracle’s Fusion for CRM in sales has integrated forecasting (65%) and 
analytics (47%) more tightly than Salesforce, addressing the top two priorities of sales organizations found in our Sales on the Cutting Edge research. Oracle is more effective in its suite of applications for human capital management (HCM), which has fully integrated its purchase of Taleo; it now has a convincing discussion of its cloud services to help HR and all employees be more efficient. Oracle also has progressed with its Fusion Applications; as I pointed out last year Oracle Fusion applications are now available in on-premises, hosted and software as a service (SaaS) methods. I like the innovation in the mobile technology that it is showing in areas like HCM. My largest concern is the continued lack of focus on the Office of Finance; Oracle’s enterprise performance management (EPM) application is still embedded within its middleware approach to BI and those in finance are most interested in business applications for their processes. Oracle’s potential to help Finance is significant but the split of its accounting and finance applications for management and operations remains a barrier that is an organizational challenge for Oracle than the buying audience readiness to advance its application portfolio.
It is positive that Oracle has gone beyond just virtualizing or cloud-enabling its applications into in-memory processing to take advantage of the growing potential of computing and memory capacity. Oracle sees its ability to handle data cache and grid in-memory as a competitive advantage, and its Oracle Database 12c and TimesTen can take advantage of D-RAM and Flash. In-memory capabilities are also important for accelerating the performance of its BI offering, which can now operate in a variety of options with its caching methods. Its acceleration of investment into in-memory and other next-generation applications for business comes just in time, as SAP continues its investment into Hana to power its applications. Oracle at this point seems to have a more comprehensive approach than SAP but will need to get these applications deployed in more organizations and build its customer reference base. Also, faster is not always better, and the usability and interactivity of the applications with the business processes will determine its future success.
For business and social collaboration, the Oracle Social Network is just beginning to roll out as part of its applications, which according 
to our research is how businesses would most prefer to access this type of software. With rollouts coming in HCM and SFA, the next year will critical for Oracle to build a strong reputation in this category; over the last decade it made many attempts to satisfy the business audience, which in the end cares about collaboration as a business technology and not as middleware, which is how Oracle has classified it. While many in the industry including IT analysts have not prioritized collaboration as important, this is more of a result to their focus on the IT organization and not one of the needs of business to collaborate and streamline their business processes and actions that require rapid coordination and dialogue. Oracle is smart to make collaboration part of its business applications first, as this is the most frequently selected deployment method in 43 percent of organizations, but other approaches including integrated with Microsoft Office (40%) and embedded as part of business intelligence (28%) or a stand-alone product (23%) are not far behind; we conclude that many organizations prefer a mixed approach. I like Oracle’s use of activity streams, broadcasting and discussion forums, all of which are part of the new evaluation criteria for social collaboration in business as we see a shift from the outdated approaches of just sharing folders and documents or posting links to files within a portal. Oracle’s offering is well integrated and now with collaboration being the second most important innovation priority in organizations, there is opportunity for Oracle if it can move forward faster with what I believe now is a good business and social collaboration software offering.
As Oracle’s opportunity grows with its range of new applications and tools for big data and business analytics, its challenges lie in marketing and presenting them to the business buyers who are leading a new wave of technology adoption; these people want to be spoken to in the language of business and time to value and will not be patient with technobabble. If Oracle can communicate with them, business buyers will find more than perhaps they expect in the Oracle portfolio of products and its ability to help them work better.
Regards,
Mark Smith
CEO & Chief Research Officer
I recently attended NICE Systems’ annual user conference, this year called Interactions 2013. In discussions of its different products and latest releases and testimonials from selected clients, I was surprised by how the messages were packaged. NICE has a long history of acquiring companies, and it has let many of them continue to operate as autonomous lines of business. Often there was minimal integration with other NICE products, a variety of user interfaces, no common software administration tools. In my opinion this policy prevented it from taking advantage of having a suite of products focused on handling customer interactions. At the conference, Zeevi Bregman, CEO and President, positioned NICE as supporting three lines of business: interaction management, fraud and compliance, and security. He explained at length how the three are inextricably linked, tying fraud and compliance and security to interaction management and customer service. Fraud and compliance is linked to customer service because market segments such as banking have to ensure that the customer service they provide conforms to legislative requirements, and security is an increasing part of knowing customers and ensuring the safety of their information. Other executives also stressed these themes.
As I delved deeper into the products, it became obvious that NICE has shifted from selling product lines to selling solutions to key business issues. Supporting this shift are greater integration of products, new user interfaces and core products targeted at business solutions. This was most obvious in the new release of customer engagement analytics (CEA). This major product announcement emphasized that it enables companies to bring together structured and
unstructured data to complete a fuller picture of the customer. As well as the now obligatory tools to support the visualization of customer information, trends and hot issues, a major capability is the ability to map and analyze the customer journey. As my research into customer relationship maturity revealed, the most customer-centric companies now use customer journey mapping techniques to determine how they expect different customers to engage with the company at different times and through multiple channels. Our research finds many departments including the contact center (77%) involved with inbound interactions increasing the need to gain consistency across channels. Customer engagement analytics takes this one step further by capturing interaction data from all touch points, combining it with other customer data and visualizing (or mapping) how customers actually engage with the company – how frequently, at what times, for what reasons, through which channels (and across channels), and with what outcomes. It also analyzes the causes that drive customers to interact with the company. Combining both sides of the analysis, companies can work proactively to improve interactions, in the moment while a call is taking place or in the future (by changing processes and refocusing training of agents).
NICE presenters also featured customer engagement analytics as supporting other solutions or business processes. In this context, they frequently used the phrase “closed loop,” which showed the influence of the Merced acquisition. When it was independent Merced had been a pioneer of closed-loop processes that complete the circle of capturing data, analyzing it to understand what happened or is happening, and finally ensuring that relevant actions are taken to improve future decisions and activities. One of the moist common examples is capturing interactions (for example, call recordings), analyzing how agents handled calls and then using this information to impact quality scores, training, coaching and call-handling techniques.
NICE’s new focus on business solutions goes beyond closing the loop, which tends to remain within a business unit and/or focused business process such as agent quality monitoring. Its approach supports what I call “joined up” thinking and processes. We all know, and my research confirms, that most companies still run as silos: Each line of business does things its own way, has its own systems and takes its own view of the customer. Joining up crosses business units, and while it doesn’t necessarily use a single source of customer data, it does at least share a single view of the customer across processes, decisions and actions. A joined-up approach also crosses communication channels to ensure customers get a consistent, personalized, in-context experience, no matter which channel, person (contact center agents) or technology (Web-based self-service) they use. NICE does this by using customer engagement analytics and bundling different products into a variety of business solutions. One of the first of these is call volume reduction, which is a bundle tuned to reduce the number of inbound calls. Another NICE is calling service-to-sales, which aims to maximize sales opportunities from service interactions. Through an increasing number of partnerships, NICE also is using CEA to influence call routing, helping companies perform smarter call-routing based on the customer’s profile, the context of the interaction and the skills required by the person handling the interaction.
Discussions about multichannel interactions inevitably led to use of a second popular phrase – big data. NICE executives insisted the company isn’t about to become a major big data player for the sake of being seen as such; rather they said it needed to place big data at the heart of what it is doing because much of that involves processing huge volumes of data, especially in the form of millions of call recordings and social media transactions, as well as video recordings. This emphasis agrees with comments by my colleague Tony Cosentino and mirrors my own view that big data per se is not the issue; what matters is what you do with it. The reality of multichannel customer service is that it produces millions and millions of bytes of data. Companies not only have to process these volumes, but much of customer service, customer experience or custom engagement happens in real-time – a phone call, a chat session, an in-store or branch office meeting or a social media post, for instance. The person or technology handling those interactions needs up-to-date information there and then to make a response based on the most up-to-date information, putting the interaction in context and perhaps most importantly personalizing it based on a complete view of the customer. Old techniques didn’t allow companies to support this approach, so I find it significant that NICE is building big data into its business-related solutions.
One such example is Mobile Reach. This product supports what NICE calls hybrid customer service or what I am tending to call connected service. We are used to hearing about assisted service, person-to-person interaction, and self-service (person-to-technology interaction). Connected service includes both, and mobile interaction is a good example. What I call the 2.0 customer is increasingly turning to mobile apps for self-service. However most mobile apps have limitations and cannot complete some types of complex interactions, even on a smart device. Connected mobile service addresses this issue by allowing certain steps to be completed on the device (such as entering basic data), then integrates that data with business applications to provide more information and/or drive next steps; if these steps don’t complete the interaction, it supports seamless connection to a live agent in a smart way; for example, it might bypass IVR because the system knows who the customer is and which person is best equipped to complete the interaction. NICE Mobile Reach is one of the smarter mobile app platforms, and I recommend that companies evaluate it as they step into this brave new world.
Also at the conference, I heard and met with several NICE customers. Of course, they were chosen because they are the most successful in using the products, but as a group they expressed two common themes. First of all becoming customer-centric starts at the top; the CEO must want to do it and support initiatives and actions that deliver a customer-focused approach. Second, employees, including contact center agents, have to buy in to the approach, commit to it and live it. To achieve this, companies must support those employees, give them the tools and information they need, and reward those who meet expectations. To do this most companies will have to re-evaluate processes and technology to determine whether they can support such an approach; they need as well to develop new customer–related metrics and not continue to rely on just those that show how efficiently things are running.
NICE is rapidly evolving to utilize technology innovations
that are priorities in organizations today. Our research found analytics and mobile technology are part of the top three today, and with the growing demand on big data that NICE is beginning to exploit. All the messages I heard from NICE were encouraging and a million miles from the old-style marketing of products that do x, y and z, and insisting they are the best. Is NICE all the way there yet? By management’s own admission, not yet. However, compared what I have seen in the past, it has come a long way on the journey and so is certainly a vendor to watch over the next few years.
Regards,
Richard J. Snow
VP & Research Director
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