Oracle User Group says budgets are static

Oracle users are having to squeeze more value from their budgets and significant numbers of projects are being delayed or cancelled because of financial pressures, a new survey from the UK Oracle User Group (UKOUG) and Fujitsu has found.

According to the ‘Economy Survey 2011’, tightened budgets have caused a quarter of companies to delay their Oracle projects for up to a year. Delays and cancellations mainly hit Oracle applications projects (more than 70%), while database projects (fewer than 10%) went largely unscathed.

Nearly 10% of respondents, who were UKOUG members but not all Fujitsu customers, experienced delays of up to six months, with 7.7% experiencing delays of between six and 12 months. Another 7.7% had delays of more than a year.

However, just 2.6% of respondents said new projects were cancelled, down from 10% in 2010.

The size of Oracle budgets for most respondents (60%) was less than £500,000, while 30% had budgets of more than £1 million and 10 organisations said they have budgets of at least £10 million.

Some 155 organisations responded to the online survey in June and July 2011, made up of private (one-third) and public-sector (two-thirds) customers.

Despite challenging budget constraints, particularly in the public sector, the survey found that more than 18% of respondents reported an increase in their Oracle budgets in 2011, a growth of more than 11% from last year. Of those who had greater budgets, the majority saw a rise of up to 25%.

Nonetheless, most of the respondents (around 60%) continued to report static budgets, while the remaining 20% either had a reduction, or to a lesser extent, cancellation, in Oracle budget.

“[Despite the economic outlook,] given the similarity of results from 2009 and 2010 and looking at the growth of increased budgets, this is again a strong statement of the business value that organisations believe they obtain from their Oracle investment,” the report stated.

Meanwhile, the survey revealed a more positive attitude to to Software-as-a-Service (SaaS) technologies.

Fewer respondents (17.4%) said that they don’t believe SaaS will help their business (down from 25.9% last year) and that they are happy without it (51% down from 55.6%).

Furthermore, the proportion of respondents using SaaS has doubled to 19% compared with last year, and the number expecting to implement SaaS in the next year has increased from nine percent to 13%. Private and public sector organisations also now have the same attitude to SaaS.

There is not the same level of agreement when it comes to offshoring, however. Public sector organisations were still more negative about it than private sector companies.

“This is interesting given the efficiency challenge we all face,” the report stated.

Overall, the number of respondents who rejected offshoring decreased by 10%, and there has been a 10% rise in the number of organisations who use it.

The survey also highlighted some areas of concern.

Although more respondents (nearly 60% compared to 40% last yet) now use enterprise licensing, more than 30% are still unaware or have yet to identify how this might save costs.

In addition, a fifth of respondents are still trying to understand the business benefits of Oracle Fusion – although this has fallen from 40% last year, it signals that Oracle may still need to do further education on the subject.

John Lacey, marketing manager at Fujitsu UK and Ireland, said: “Hardware strategy understanding is high but understanding on SOA has stalled. Awareness of Fusion’s business impact is a cause for concern given its maturity as a strategy. Oracle and its partners need to try harder to communicate the benefits to the Oracle customer base.”

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