At Oracle Open World 2019, Steve Miranda, executive vice-president of Oracle Applications product development, spoke to Computer Weekly’s business applications editor, Brian McKenna, about the supplier’s approach to cloud applications, digital assistants, machine learning and other topics. What follows is an edited and compressed version of that interview.
Miranda is responsible for leading all aspects of product strategy, product development and product delivery for the Oracle Applications and related services portfolio. He joined Oracle in 1992 and has held a variety of leadership positions within the supplier’s development organisation. In 2007, he started to lead the engineering of Oracle’s suite of software applications, Oracle Fusion Applications. Previously, he worked at GE Aerospace. He holds degrees in mathematics and computational sciences from Stanford University.
Here are his answers to Computer Weekly’s questions.
One way to think about business applications, especially in the cloud, is like this: you’ve got, as a a company, your core business-supporting applications where you’re looking to get competitive differentiation. And then you’ve got the more functional areas where you just have to have software that supports HR [human resources], finance and sales and marketing. Now, getting the right mix for a SaaS [software-as-a-service] supplier must be a strategic issue. Take SAP, which is strong in SaaS for HR, expenses, procurement, managing contingent labour, and so on, but whose core ERP [enterprise resource planning] – S/4 Hana – is largely an on-premise product, with, so far, exiguous cloud delivery. What is your perspective on how you see Oracle’s mix in terms of the portfolio of applications that you deliver over the cloud?
We have a complete suite of applications: core ERP, HR, CRM [customer relationship management], and so on. In terms of your point about what’s just a system to record versus what’s a system that can differentiate varies widely depending on the industry and the customer problem.
So let me give you a couple of examples. More and more, we’re hearing on the HR side – something that you put in the bucket of “hey, you just have to do this” – we’re hearing that HR, particularly with the new generation of workforce coming in, can be a substantial differentiator. What impression do you give to your employees?
What’s employee satisfaction like? Or the recruiting effort itself – having a modern recruiting application that goes through the channels that you would expect, meaning you have LinkedIn integration, you have social integration. And then having the ability to use machine learning to help filter or rank the candidates who may be the best fit for you. And once you have successfully concluded with the candidate, give them a very good onboarding experience, so that their first impression on their first day is good, and so on.
So, once you get beyond traditional HR record keeping, what we’re hearing from more and more companies is that this is becoming a competitive issue, either with an inability to recruit effectively in the new generation workforce or to retain effectively.
A second example, more on ERP, is that many companies are now either trying to disrupt their industry or are being disrupted. And so they have to fundamentally change their business model. For instance, at Oracle, we’ve moved from a traditional products company to a services company.
And if you’re not able to move flexibly into the new business models, or if you’re a manufacturer unable to move into distribution mechanisms, that’s an impediment, and that’s where ERP becomes much more mission-critical. And with CX talking to your customers, that is almost a de facto mission-critical product, and that has changed substantially as well.
So, what we see more and more is that the customers who are moving to the cloud are doing more so because the systems are mission-critical, whether it be ERP, HR or CRM.
Rather than maybe going for low-hanging fruit? Surely, still, getting a SaaS application for HR is one thing, but putting the ERP that runs your core business on the cloud is another.
I think we’re seeing less of that low-hanging fruit approach. I think initially, when SaaS was happening, people wanted to ensure that it would work, that their data was secure in the cloud, they wanted to make sure they could trust the vendors. They wanted to make sure the products were mature enough. I think now, our customer base sees the product and the service and the offering is very mature. I think customers are seeing that now, so it’s less, “let me try it out with some low-hanging fruit”. It’s more “let me solve a business problem”.
Our readers, especially the CIOs among them, are interested in what’s the advantage they get from having their business applications delivered over the cloud. What can they do that they could not do before?
Speed – it is all about agility, all about speed. And there are two parts to speed. There are the technical parts of speed. The underpinnings of the applications are changing faster than ever. We introduced a ton of new database technology at this conference, and so when you get the updates to your SaaS application, de facto you get that. Mobile is obviously exploding, as is social, and digital assistant or bot-based conversational UI [user interface].
And then you have functional speed. So, product companies becoming service companies, with subscription billing becoming the new norm. You have things like IoT [internet of things], which in manufacturing businesses has gone from “should do it” to its being very commonplace. You have blockchain that’s starting to take hold in certain areas, and the technical combined with the business innovations means you need to have a platform that’s updated by default, as opposed to a traditional ERP platform that you updated every 10 years.
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Talk me through the significance of the digital assistants piece that you’ve been talking about a lot at the conference.
I think in a lot of places, a digital assistant will eliminate the HTML or browser UI altogether. I think you’ve seen that in your personal life. You see people using voice to send emails on their phone, dictating texts. Or take HR transactions that are basically query only: “What is so-and-so’s email address or phone number? What time zone is she in? Who’s her manager? Who’s on her team?” Or, as an employee: “What is my vacation balance?”
Talk me through your thinking about your style of machine learning. In the market, we have seen these fancy names for machine learning and, more broadly, AI: SAP’s Leonardo, Infor’s Coleman, IBM Watson, Salesforce Einstein. At Oracle, you seem to have taken a more prosaic and pragmatic approach. Is that fair?
I’ll take that as a compliment. I think labelling things and features as machine learning will be a very short-lived phenomenon. It’s more necessary right now just to let people know we have it. But very soon, you won’t be saying “we’ve added machine learning to financials or HR”. It’s just the way the software is going to work.
Now, it’s probably a little bit premature to say AI is pervasive – it’s not everywhere yet. Our approach is that you take data, you apply machine learning algorithms contributed from other parts of Oracle – but, quite frankly, are well-known algorithms from university computer science – derive a recommendation, you surface that recommendation in your applications, you measure its performance, the algorithm gets better and better, and so on. And you don’t limit yourself to data within the system. That’s just the way we think things are working.
But, you know, at the end of the day, none of this matters unless our customers are successful. We are extremely pleased and proud of the success our customers are having with our products, whether IBVI [Industries for the Blind and Visually Impaired], Ferrari, Hearst or Hilton, all of whom were on stage with me. They are doing things that would not have been possible in the pre-cloud era.