Oracle yesterday reported surprisingly weak results for its fiscal quarter ending on November 30 (see December 20, 2011, "Oracle Reports Q2 GAAP EPS Up 17% to 43 Cents; Q2 Non-GAAP EPS up 6% to 54 Cents"), with total revenues up just 2%, software revenues up 7%, hardware revenues down 10%, and services revenues flat. Even worse, hardware product sales were down 14%, new software license revenues rose just 2%, and license revenues for Oracle applications actually fell by 4%. Oracle had set expectations for revenue growth of 5% to 15%, and most financial analysts had projected growth at the high end of that range, based on Oracle's license revenues in prior quarters growing by 22% to 34% for applications, and 14% to 27% for database and middleware revenues. Oracle attributed the shortfall in revenues to potential deals that failed to close by the end of the quarter due to buyer caution.
For the tech sector, this is a worrisome report. Oracle's software revenues had been consistently stronger than the overall tech market, growing by 17% in US dollars in the prior quarters in 2011. If Oracle's software revenue growth slips to 7%, does that imply that the rest of the tech market is going to see little or no growth in Q4 2011?
Ultimately, customers don't judge you based on how well you gather business requirements, choose development technologies, manage projects, or march through the development process — they judge you based on how they feel before, during, and after they use your software. This is the digital experience. If you get the customer experience wrong, then nothing else matters. And expectation inflation is sky-high thanks to the Apple-led smartphone revolution. To succeed in the new age of digital experience, application development professionals must collaborate with their business partners and customers to create experiences that customers love. You need a new approach represented by these five axioms:
Software is not code; it creates experience.
Development teams are not coders; they are experience creators.
Technical talent is table stakes; great developers must be design and domain experts.
Process is bankrupt without design; you get what you design, so you had better get the design right.
Software is a creative endeavor, not an industrial process like building automobiles. Structure your methodology to empower your creative talent.