Oracle application upgrades driven by end of support

Two surveys asked Oracle customers about their upgrade plans

Two new Oracle user group surveys show that customers have a mixed bag of plans for ERP (enterprise resource planning) application upgrades, with concerns over expiring support windows cited as the leading impetus for ongoing or upcoming projects.

Both surveys were sponsored by Oracle and conducted by Unisphere Research.

For one, Unisphere surveyed 327 members of the Oracle Applications Users Group. Thirty-one percent are already running the current version, release 12.x, of Oracle's E-Business Suite, while some 61 percent are still on version 11.15.10, according to the survey.

Thirty-six percent of respondents said they had recently upgraded or are in the process of doing so, while another 44 percent said they planned to upgrade within two years. Six percent had no plans, while 13 percent weren't sure.

"End of support" was the most popular "compelling reason" cited for upgrade projects, cited by 73 percent of respondents.

Oracle, like other software companies, charges customers more money for annual support on an application as a given release gets older.

However, Oracle of late has repeatedly waived extended support fees on certain applications, most recently on E-Business Suite 12.0. Analysts have viewed Oracle's moves as attempts to preserve maintenance contract renewals and fend off competition from third-party support vendors like Rimini Street, which cater to customers that have older, stable systems and little desire to upgrade.

Meanwhile, another 40 percent of OAUG respondents named "better functionality" as a strong motivator for an upgrade, but only 20 percent cited a desire to prepare for adopting Oracle's new Fusion Applications, which went into general release last year after a protracted development process.

Oracle has stressed that Fusion Applications can be consumed in highly modular form by customers. Some observers don't expect many full-blown Fusion Applications upgrades until later releases arrive to more fully reflect the capabilities in Oracle's older products.

OAUG members surveyed also showed little appetite for moving their ERP systems to hosted or cloud environments. Seventy-one percent of those planning or conducting upgrades are running the software on-premises now, and will keep it that way. Only 4 percent were moving to a subscription SaaS (software-as-a-service) environment.

Overall among companies preparing for or conducting projects, 34 percent are doing a "functional" upgrade, which includes new capabilities as well as a technical update to the underlying tools and technology. Another 12 percent are going for "transformational" upgrades, while another 23 percent said only a technical upgrade was in the works.

Unisphere also surveyed 308 members of the Quest International Users Group, which caters to JD Edwards and PeopleSoft users.

Eighty-two percent of companies upgrading or in the planning stages to do so cited end of support as a top reason. Some 57 percent named new functionality, while only 10 percent cited preparing for Fusion Applications.

Just under half have already or are in the process of migrating to newer versions of PeopleSoft and JD Edwards, according to the survey. Functional upgrades account for 42 percent of these projects, while only 8 percent are "transformational." Another 17 percent were "functional upgrade-plus," meaning they added new software modules.

Another 33 percent of Quest respondents intend to upgrade within two years, while the remainder either had no plans or weren't sure.

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

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