Cloud

Do Oracle’s OOW cloud announcements signal the death of on-premises EPM?

This week at Oracle Open World, Oracle has announced more details around a few new EPM Cloud products (Essbase Cloud Services, PCMCS, and DMCS) in addition to their already existing stack of SaaS cloud services (PBCS, EPRCS, EPBCS, ARCS, and FCCS).
axeWith these new offerings added to their stable, is this the death of on-premises EPM as we know it?

Oracle’s stated direction of product strategy for the EPM products is to tap into unserved business users. EPM has been predominantly used by corporate finance departments from the beginning. At one point, Hyperion was marketed to CFOs and not CIOs because it could be run on an administrator’s computer under a desk without IT involvement. The evolution of EPM cloud is a return to the golden age of Essbase – easily created departmental applications that provide better analytic ability than Excel alone.

The EPM cloud products are really all about allowing easy adoption for non-traditional EPM users and providing rapid value to their customers. Spreadsheets still dominate at small to medium companies. The cloud offerings are really simplify life for those companies who struggle with maintaining servers and have a lack of technical skill at designing an optimized solution. With the EPM cloud products, it’s very easy to roll out a Workforce or CapEx application in EPBCS by sending out the URL and paying the monthly subscription fees. The cloud also allows the business users to be in the driver’s seat by not needing IT resources to get them up and running.

As we know, there is a long way to go yet on the EPM Cloud roadmap to get all of these products working well together. For instance, how exactly do we get data from our EPBCS application into ESSCS for additional reporting? How about my BICS dashboards using data from my ESSCS departmental cube or my PBCS budget data? It’s clear to see that with Oracle’s growth in the cloud and continued development of additional features and functions on the cloud products that these drawbacks will be remedied in time.

This whole cloud thing is just a fad, it will pass, right?

Even Mark Hurd stated during his keynote on Monday that the cloud is no fad, it’s a generational shift that is here to stay. Oracle has stated publicly that they fully intend to continue to support and develop EPM on-premises solutions. Matt Bradley, SVP for EPM and BI Development at Oracle, has said that Oracle expects most companies will enter into a hybrid cloud implementation if and/or when they decide to move their investments into the cloud. They have developed tools in DRM and FDMEE to support these hybrid cloud implementations. The shift to cloud computing is happening, but it doesn’t signal the immediate end of the line EPM on-premises. Once the cloud products have fully matured, there may continue to be valid use cases for on-premises EPM products going forward.

So, what is the future of my on-premises investment?

The market indicates that there is a healthy appetite for cloud solutions and all indications are that Oracle expects even large customers to eventually move their EPM investments to the cloud. While the on-premises products are still being developed, the availability of new on-premises versions has slowed down. For the last few years, we were blessed with several major releases of EPM software from 9.3.1 to 11.1.2.4. Oracle noted that the software release adoption cycle was about every two to three years, so we expect that the new software releases for on-premises will be more in line with those adoption cycles. We should expect to see some new features and functionality through Patch Set Updates to the latest code line in between major upgrades. Future on-premises releases will begin to showcase a simpler architecture to the components and focus on usability.

What should we do with our on-premises EPM environments now?

If you haven’t already upgraded to version 11.1.2.4, it is highly recommended. The 11.1.2.4 code line has some great features like better support for Essbase Hybrid Aggregation, improvements in HFM consolidations, FDMEE data synchronization between EPM applications, and the new Financial Reporting Web Studio. I have been on several calls with customers who are still working in old releases and the Classic Essbase add-in. It is time to move on and update those environments. If you have upgraded to version 11.1.2.4, it’s highly recommended to keep up with the latest Patch Set Updates on at least a quarterly basis. Sometimes applying the latest patches may cause some issues, so thorough testing of new patches is always recommended before implementing into production.

Staying on the latest release also allows companies to bridge from on-premises to cloud much easier. For example, as mentioned earlier FDMEE and DRM already support hybrid cloud implementations. Oracle has doubled-down at OOW 2016 on their assertion that cloud computing is the future. While on-premises EPM software isn’t going away any time soon, the cloud products are going to continue to mature rapidly. As the cloud products develop and integrations between them become more defined, more and more companies are going to see the benefits of moving their EPM investments into the cloud.

The times they are a-changin’

Collaborate ’16 has come and gone. I was fortunate enough to be able to join in on Monday of the conference for the OAUG Hyperion SIG meeting. As part of the conference, I was able to join a couple of road map sessions and speak directly with Oracle EPM marketing folks; it is clear that we are in the midst of change.

To be clear, I do not mean to directly equate today’s technological shift with the political, social, and cultural upheavals of the early 1960s. To do so would be a slap in the face to the many heroes of the time, especially those that gave their lives for equality. Bob Dylan created an anthem of change and expressed his feelings in generalities that can fit many circumstances. That is what makes his song relevant for so many even today.

I was recently watching a webcast replay by Joe Aultman, a guy who I really respect and consider a friend, about Essbase and whether it belongs under the control of IT or the business. Joe gave this presentation live during KScope 15 for those lucky enough to be there. During the presentation, Joe went through an excellent history of Essbase.  He spoke about how it started as a tool that was sold to Finance and sat on a server under someone’s desk at many companies. How exciting those early days were.

I have been working with Hyperion directly for more than ten years. Before that, I worked closely with the Hyperion Enterprise administrator and he showed me a few things so I could back him up. We ran Enterprise on a Citrix server, but we pretty much had full control of the box with very little IT intervention at all. It was fantastic! Thankfully we didn’t ever need a whole lot of help with that environment.

About a year later when I started with Essbase, a co-worker showed me how to install Essbase 6.5.4 on my desktop so that I could play with an outline to replace that old Enterprise application. Our installation in production was version 9.3.1, though. We had IT to manage our servers now. I had to practically beg to get a batch script scheduled on the server for nightly backups of our data.

With the complexities of the EPM System today it’s hard to imagine anyone implementing Essbase without IT support. With Oracle’s EPM and BI Cloud Services, what’s old is new again. Departmental applications can once again flourish as the Enterprise Planning Cloud and the upcoming Essbase Cloud Service offerings reduce the rigidity of IT and allow the business to control their applications.

There is no doubt that Oracle is making a strong push for customers to join the cloud revolution. That push is strong enough to make infrastructure consultants like me who are heavily reliant on the on-premises software model take notice. So, what is an infrastructure person to do? Diversify.

Luckily, I started in Hyperion with an application background. I learned Essbase inside and out at Wells Fargo Home Mortgage, then I went into consulting and learned Planning, FDM, ODI, infrastructure, OBIEE, enough to be dangerous in HFM, FDMEE, etc. I think the real sweet spot for developers like me is in data integration. The technology will keep changing, but we are always going to need to move data from one application into another.

As the underlying technology changes, this blog must also change to reflect the current trends and hopefully help anyone who stumbles across this site. Honestly, this blog was never about one particular thing. While I have primarily focused on infrastructure, there are a lot of areas in the EPM and BI world to be explored.

Come gather ’round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You’ll be drenched to the bone
If your time to you
Is worth savin’
Then you better start swimmin’
Or you’ll sink like a stone
For the times they are a-changin’.

-Bob Dylan, The Times They Are a-Changin’, 1964

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