Monday May 20, 2013

On Economics and Enterprise Software - Comparing Apples to Asparagus

Lyle Ekdahl, Group Vice President General Manager, Oracle’s JD Edwards

“Substitute your lies for fact I can see right through your plastic mac…” The Who

In recent discussions in the board rooms of some of my customers and as discussed in various media outlets from current age Twitter posts to classic WSJ articles, there seems to be a common discussion based on a fundamentally flawed premise. OK you ask, “What the devil are you talking about?” Well, maybe I should start with the basic proposition. “Why would anyone in their right mind pay a vendor $X for a good or service when they can get the exact same thing for $½X?” Why indeed? If people are handing out bowls of free money why would you not want to belly up and drink deep?

Unfortunately that is where the discussion goes awry. As your dad used to tell you, “Money does not grow on trees.” At least I hope that is what he told you. In fact, the reason why the other good or service is cheaper really falls into just a few categories – there a cost advantage, a technology applied, etc. The first category that always needs to be explored is the economic concept of substitutes. Specifically meaning, do two compared products or services have a positive cross elasticity of demand. Classic economic examples are margarine and butter or petroleum and natural gas. Now the substitutability of any two compared goods is always a matter of degrees but if one is really trying to get to the heart of the matter, again why would I pay a premium for one offer over another, you need to start with the concept of the “perfect substitute”. To define the “perfect substitute” is to say that utility is perfectly equal such that the marginal rate of substitution is constant and I would add without any loss in value or increase in risk.

“Why go through that trouble of comparison?” your CFO may say. “Cheaper is good.” That is when you pull out another old adage, “You can have cheap or you can have good, but seldom can you have both.” To put a finer point on it, try this comparison, “ A personal auto and a bus ticket are both transportation and a bus ticket is a lot less than half the price of a car, so why are there so many dang cars on the road?”

The answer of course is utility, or the total satisfaction and or value received in consuming the good or service. Now the classically trained economists are going to jump on this one as they see I equated utility with value. Please keep your Menger, Wieser and Bohm-Bawerk out of this discussion for now. We can address the higher order of mans’ needs and desires in future blog posts.

So now the beef or perhaps the chicken of the matter, let’s take for example the fees associated with Oracle’s JD Edwards maintenance. For theory sake, let’s just say that there were “agents” in the market that make a claim they have a perfect substitute that costs you 50% less. Again intriguing until you break down the actual offer and the utility or value received.

So what do Oracle’s JD Edwards maintenance fees buy you anyway? Well, there are actually multiple categories and layers of valuable deliverables in the offer. The most succinct list of value categories that I can find includes ten as delivered by Oracle’s JD Edwards Development and Support:

1) Future rights to product & technology releases
2) Technical Support (Trouble shooting, issue identification & resolution)
3) Knowledge Base Access (Exposure to the issues and resolution across a broad community – 1000’s of customers)
4) Updates, patches/fixes (Both new features and fixes to bugs)
5) Proactive security, data integrity, performance and scalability testing & resolutions (Yes we are watching what the “hacksters” are attempting and we have your back)
6) Tax, legal and regulatory updates (Yes we are watching what governments are attempting and we have your back)
7) Upgrade Scripts (So that you can exercise your rights)
8) Certifications with New Oracle Products (Oracle buys lots of stuff)
9) Certifications for existing third party products and versions (Have you noticed the rate of change in browsers?)
10) Certifications for new third party products and versions (Yes technology marches on)

A pretty impressive list if I do say so. However, there is one additional factor that needs to get on the table. To oversimplify a bit, JD Edwards’ products come in two chunks– that which is non-compiled and that which is compiled. I bring this up to make sure you are aware that certain functions in the list of ten can ONLY be performed at the factory, so when assessing value and making a comparison be aware of what is and is not possible.

For example, if you are willing to take the 50% off pitch you should be prepared to freeze your technical infrastructure. So to paraphrase Seinfeld’s infamous Soup Nazi, “No new browser for you,” even if it becomes the corporate standard or plugs a security hole.

More later, but for now I will leave you with this thought: have you ever asked yourself what is the difference between a can of chicken purchased at your local grocer conveniently located down the canned meat aisle and that which you can find five rows over in the cat food section? Looks to me like a can of chicken designed for your family’s cacciatore is about two times more expensive then the chicken you put on the floor for Fluffy - Caveat Emptor or perhaps I should say, Bon Appétit.


Thursday Aug 25, 2011

Oracle’s One Big Happy Virtual family…..well almost!

by AJ Schifano - JD Edwards, Principal Product Manager (Tools/Technology)

Tron—remember that sci-fi movie from 1982? I just got around to seeing the 2010 sequel. Still a cool concept: the computer whiz-kid gets sucked into the virtual world. I suppose that there are a number of us in the IT arena that are immersed in and loving what the virtualized world affords our companies these days.

I base this observation on the question that I am asked quite frequently in one form or another: “Can I virtualize my JD Edwards EnterpriseOne servers?” Oftentimes the question is directed at some specific virtualization product, such as Oracle VM, VMware, Hyper-V, Oracle VM, among many others.

The answer is quite simple and direct: yes, you can virtualize your JD Edwards EnterpriseOne servers. You don’t have to take my word for it. The next time you attend a conference or users’ group meeting, just ask your peers. It’s highly likely that many—perhaps even most—are already virtualizing some layer of their JD Edwards EnterpriseOne implementation.

The first question inevitably leads to the next question, usually phrased more explicitly: “Is JD Edwards EnterpriseOne supported on VMware?” [In place of VMware, feel free to insert your favorite virtualization product.]

The answer to that question is also quite simple and direct. JD Edwards EnterpriseOne, being an Oracle product, follows Oracle’s broader policy, which is clearly stated in My Oracle Support document 249212.1.

I think the following excerpt from that document summarizes the essence of Oracle’s policy: “Oracle will only provide support for issues that either are known to occur on the native OS, or can be demonstrated not to be as a result of running on VMware.”

Therefore, if a customer chooses to virtualize some components of their JD Edwards EnterpriseOne infrastructure using a virtualization technology from a vendor other than Oracle, the customer will not be “exiled” from all support activity. In truth, most application issues do not trace to the underlying server being physical or virtual. These issues can be resolved completely transparently to the server layer.

However, if an issue does trace itself to an anomaly in behavior between a physical server and a virtual server, the Oracle support team will refer the customer to their third party virtualization vendor. This includes issues such as:

- “It used to work like [this] on my physical server, but now it works like [that] (or it doesn’t work) on my VMware machine.”

- “It used to be fast on my physical server, but now it’s slow on my VMware machine.”

- “Can you provide instructions for installing and configuring JD Edwards EnterpriseOne on VMware?”

Oracle product teams, including JD Edwards EnterpriseOne, do test with and provide support for configurations running Oracle virtualization products. The Oracle virtualization technologies that we have tested JD Edwards EnterpriseOne with are detailed in a Minimum Technology Requirements (MTR) document here:

The bottom line: Oracle product teams, including JD Edwards EnterpriseOne, test with and provide support for configurations running Oracle VM. We do not test with nor “certify” configurations running virtualization products from other vendors.

Oracle strives to offer industry-leading solutions at every tier in the technology stack, including virtualization, yet we acknowledge that our customers may use a mix of solutions from an array of technology vendors. A clear understanding of Oracle’s policy and guidelines for support help customers weigh the benefits, costs, and risks in order to make informed technology choices. 

Wednesday Aug 03, 2011

"Procrastination is the art of keeping up with yesterday." ~Don Marquis

By Bob Monahan,  Sr. Director Oracle JD Edwards Applications Strategy and Product Management

In the last several months I have met with many customers who ask the same question regarding upgrading their current JD Edwards World or EnterpriseOne release: should I upgrade to the current release or wait for the next release. This is a very key question as it begins to form the basis of a larger overall upgrade planning strategy looking many years into the future.

Clearly there is no single answer that applies to every customer. Many factors outside of specific software functionality need to be considered as part of the upgrade and timing decision such as plans around hardware and infrastructure, current release support timelines, the business culture of being an early release adopter, financial budgets and availability of funds, cyclical busy times of the business, and other strategic business projects competing for the same resources just to name a few.

Many customers considering upgrading today have asked why move now since Premier Support for JDE World A9.2 and JDE EnterpriseOne 9.0 are already more than halfway through their respective Premier Support timelines. The thought was to just wait until the next release comes out to get the most time out of a new Premier Support timeline starting with the GA of the next major releases. However, the problem with waiting is that business conditions or factors mentioned above could change from today and prevent an upgrade when the new releases are available, plus many of the features available in the now current releases can provide significant and immediate benefits now. Both World and JDE EnterpriseOne are PLANNING major releases in calendar year 2012. Procrastination can sometimes be very hard to overcome.

To address this timing dilemma, JD Edwards listened to our customers and announced in April at the Collaborate User Conference that we are designating major release status to JD Edwards EnterpriseOne Release 9.0, Update 2 and JD Edwards World Release A9.2, Update 1. The result of this designation is that JDE EnterpriseOne 9.0 Update 2 is covered under Premier Support through November 2015, with an optional 3 years through November 2018 for Extended Support. World A9.2, Update 1 is covered under Premier Support through May 2015, with an optional 3 years of Extended Support through May 2015. This change removes the barrier to upgrading now due to a short Premier Support timeline and then having to consider another upgrade maybe two years after going live. Customers now have plenty of time to upgrade to the current and proven releases and then plan evaluate their strategic upgrade plans going forward.

Some customers may view the new capability coming in the next major releases (available on-line through My Oracle Support via the Electronic Upgrade Value Proposition Tool) as key business value drivers and decide to upgrade directly to the next major release. However, these customers should still consider starting with upgrade planning (net change evaluation, the need to forward fit custom modifications, end user training, technology stack upgrades…) with the current releases. This is all work that needs to be done so why not start now. Then applying the update to go from the current releases of World and EnterpriseOne to the next major releases will be a much smaller part of an overall upgrade project. Bottom line: there is much you can be doing now even in a test environment so don’t put all of the work off waiting for the next releases.

World customers have one additional consideration- stay on World and upgrade to the next major release, or migrate to JDE EnterpriseOne. Again, this your choice based on what you believe best meets the needs of your business. We have published a World To EnterpriseOne Upgrade Advisor on My Oracle Support to help with this evaluation as well.

We can also work with you or your implementation partner to answer questions on this important decision. Please let us know if we can help. And thanks for being an Oracle customer. 

Friday May 27, 2011

Starving to death while standing in the parking lot of a supermarket with cash in hand…..

Starving to death while standing in the parking lot of a supermarket with cash in hand….a situation that would seem ludicrous to all of us, yet, it seems to be a fitting analogy to happens all too frequently when it comes to ERP system usage and support. Let me explain...[Read More]
About

Welcome to the JD Edwards Blog. Post are contributed by the JD Edwards strategy and development teams, covering a broad range of topics. The goal of the blog is to create opportunities for information and idea sharing, to engage JD Edwards customers/users, partners, and Oracle employees in conversation, the spirit of improving the experience and effectiveness of all that participate in the community. Both EnterpriseOne & World products are fair game for blog topics. Topics will cover functional, technical, business topics,but it is not the intent of this blog to provide "support" activities and those discussions will be best served via My Oracle Support or Oracle Mix. We invite your comments and feedback, and look forward to lively conversation.

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