PeopleSoft Inc. will be integrated into Oracle Corp. next month, right after the expected close of the US$10.3 billion deal, according to Oracle Co-President Charles Phillips.

During a press conference last week, Phillips said the two companies are already working on the integration plans.

But Bill Swanton, an analyst at AMR Research Inc. in Boston, predicted that the integration will be easier said than done. "They will have to work very hard to succeed," Swanton said. "There are lots of places (where) they could run into trouble."

Product plans

Without disclosing much in the way of details, Phillips said that Oracle will continue to enhance PeopleSoft"s existing products and will develop new versions of both the flagship PeopleSoft Enterprise suite and the EnterpriseOne line of midmarket applications.

Phillips also said Oracle will continue to maintain the World green-screen applications that PeopleSoft gained along with EnterpriseOne through its mid-2003 acquisition of J.D. Edwards & Co.

Over time, Phillips said, Oracle plans to merge the functions of the PeopleSoft and Oracle product lines so they "look more alike" and to make it easier for users to migrate from PeopleSoft to Oracle.

Oracle said its E-Business Suite software will eventually become the more advanced set of applications. The company wouldn"t say whether the merged products would support databases from vendors other than Oracle.

"With the database, it"s hard to say," Phillips said. "I would surmise that at some point there would be customers who perhaps are using PeopleSoft on DB2, and they"ll end up with the Oracle product and database as well."

Swanton said Oracle must quickly convince users that they won"t be forced to give up their PeopleSoft applications overnight. "No one is going to pay full maintenance just to be ported to the E-Business Suite," he said.

Phillips acknowledged that Oracle has to keep its new customers happy to hold on to maintenance revenue. "We have to give good service and give them a reason not to look elsewhere," he said.

Oracle does plan to do some rationalization of the technology -- which most likely means paring down PeopleSoft"s reliance on BEA Systems Inc."s and IBM Corp."s middleware stacks in favor of its own products, Phillips said.

In an e-mail, Phillips acknowledged that many mergers in the IT industry have failed, but he pointed out that "a few deals have worked." He cited SAP AG"s acquisition of TopTier Software Inc. for its portal technology and many of the deals made by Computer Associates International Inc. as examples.

"(The buyout) wasn"t easy, but this a good thing for the industry," he said.