The year in enterprise software: Seven key takeaways

Larry Ellison embraces the cloud, mobility becomes a first-class citizen and SaaS reaches an inflection point

It's been a busy and transformative year for enterprise software. We dug through our story archives, talked to industry experts and put on our thinking caps to come up with this list of key events and emerging trends from 2012, all of which are set to have a lasting impact on the industry.

Larry Ellison gets cloud religion: During an event in June, Oracle CEO Larry Ellison seemed like a much different person than the man who once openly mocked cloud computing as marketing fluff.

Ellison unveiled a wide array of new and planned cloud products under the Oracle banner, from Fusion Applications to the Oracle Social Network to a PaaS (platform as a service) offering.

The CEO even declared that Oracle would deliver "the most comprehensive cloud on the planet Earth."

"It'll be interesting to see how Oracle crafts its cloud strategy," said Forrester Research analyst China Martens. Veteran ERP vendors like Oracle face "an interesting balancing act" in comparing their legacy on-premises software to new cloud alternatives, she added.

SAP admits need for 'cloud DNA': Like Oracle, SAP had a serious change of heart about the cloud in 2012.

SAP's US$3.4 billion acquisition of SuccessFactors, which closed this year, was an acknowledgment that its own cloud development efforts weren't enough, said analyst Frank Scavo, president of consulting firm Strativa. This was even after SAP had already spent hundred of millions of dollars to develop its own Business ByDesign cloud suite and began rolling out a number of line-of-business cloud applications, he added. SAP later followed up the SuccessFactors deal with another expensive buy,scooping up Ariba for $4.3 billion.

SaaS moves into the back office: Workday has seemed to surpass Salesforce.com as the 'it' cloud software vendor of late, Salesforce.com's continued rapid growth notwithstanding. This is due to Workday's success in landing major enterprise accounts for its HCM (human capital management) software, with some deals constituting hundreds of thousands of seats. It also may be a sign of anticipation that Workday will achieve similar success with its financials software over time.

SAP is also investing heavily in SaaS (software as a service) HCM through its SuccessFactors acquisition, and recently launched an application called Financials OnDemand. Oracle is weighing in as well with its Fusion Applications HCM and financials software, which are available from the cloud if desired.

SaaS found much of its initial success with customer-facing "front office" applications such as the CRM (customer relationship management) software sold by Salesforce.com. The fact that so many customers seem comfortable now running back-office processes via SaaS is a telling indicator of the deployment model's maturity.

Mobile becomes a must-have: As the year draws to a close, it's difficult to find an application vendor press release that doesn't mention any options for mobile device delivery, whether via native applications or a cross-platform HTML5 client. SAP executives have even said the company considers "mobile first" in terms of new development.

Oracle's database dominance at risk?: For some time, Oracle has been used to standing at the top of the database market, but could its lead diminish? Some indications say yes, but nothing seems set in stone.

"Oracle's relative position in database innovation is deteriorating," said analyst Curt Monash of Monash Research. "Hadoop and NoSQL have become more established. Microsoft is doing more interesting things. In-memory progress is slow. And the lack of true columnar capability is a real eye-opener."

The release of Oracle's upcoming 12c database, which is expected sometime in 2013, could swing the competitive needle firmly back in the vendor's direction.

Meanwhile, SAP is hoping sales of its HANA in-memory database continue to grow. It is also working on new capabilities for HANA that will enable customers using Oracle to run their SAP ERP (enterprise resource planning) software to make the switch.

Cloud integration market matures: During 2012, it became more common to hear of companies using not just a couple but many SaaS applications. Appropriately, the market for tools and services that help customers tie SaaS to other on-demand applications, as well as on-premises installations, showed signs of strength.

A robust set of choices for cloud application integration, single sign-on and other capabilities could result in companies running the bulk of their operations with a best-of-breed SaaS suite.

ERP goes social: This was the year when ERP embraced social collaboration software, evidenced by Microsoft's purchase of Yammer, Oracle's multiple social software acquisitions and SAP's recent rollout of its Jam platform, according to Forrester's Martens. "It seems like every ERP vendor has some sort of 'Facebook for the enterprise' story and is now trying to move beyond that in a bid to differentiate its own take on social collaboration," she said via email.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com

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Chris Kanaracus

IDG News Service
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