PeopleSoft users uncertain, hopeful over Oracle"s moves

19.01.2005
Von Marc L.

Oracle Corp."s somewhat sketchy blueprint for merging with recently acquired PeopleSoft Inc. is drawing mixed reviews from customers.

In a webcast Tuesday, Oracle executives talked about how they plan to retain the PeopleSoft accounts they have inherited, as well as handle the support and development of its three lines of software (see story). There were few surprises, and Oracle executives repeatedly pushed the notion that customers won"t see any disruption in support or in the way their accounts are managed.

Most users will have support until at least 2013 for what they have now, and by that time, Oracle, as part of its Project Fusion plan, says it will have crafted a new set of modular, Java-based applications that offer the best of both companies" technologies.

Oracle CEO Larry Ellison was emphatic that customers wouldn"t be forced off their applications and that upgrades would be "fairly graceful."

On the company"s support policy, he said: "At the very worst, it"ll be exactly the same as what PeopleSoft had, and in many cases, we"re lengthening the support." As a further sop to potentially disgruntled PeopleSoft customers, Oracle has also extended for two years the support for J.D. Edwards & Co."s OneWorld XE ERP package, which was originally was no longer going to be supported as of next month. That deadline was a big bone of contention among a number of users.

"I have to admit to great surprise at the extension for two full years," said one of those customers, Robert Robinson, business systems supervisor at Durr Industries Inc., an automotive supplier in Plymouth, Mich. He had been lobbying for a one-year extension, and with this move, "Oracle just made a fleet of XE users very happy," he said.

"This is not enough to make me drink the Kool-Aid, but it shows sensitivity to the needs of J.D. Edwards users," Robinson said.

"Although I"d argue it (the XE support extension) was an easy decision on their part, it does buy them a lot of goodwill from the One World community," said Ken Meidell, CIO at Seattle-based outdoor specialty gear maker Cascade Designs Inc., an XE shop. Nevertheless, Meidell said he has doubts that Oracle can deliver on all of its technical promises and simultaneously please customers and investors alike in the time frame the vendor has set for itself.

Oracle"s technical direction is also problematic, Meidell said, because Cascade has standardized around the Microsoft Corp. technology stack and uses only Microsoft-compliant tools.

While not enthused about migrating to Fusion, he said he might have to consider it, unless SAP AG or Microsoft can create tools that would make an ERP conversion as simple as a regular upgrade. On the other hand, staying on OneWorld XE would also provide challenges, since "I"m eventually stuck with a system I"ll outgrow, " he said. "What happens when a game-changing technology comes along, like RFID, and I end up writing more and more custom code to support it?"

"I"m on the path of cautious optimism," said Jim Prevo, CIO at Green Mountain Coffee Roasters Inc., a PeopleSoft Enterprise shop in Waterbury, Vt. Prevo said he intends to keep using his applications, but will be watching Oracle"s pricing and development policies as they develop. If Oracle doesn"t treat new PeopleSoft customers like a cash cow -- something he feels the company has done with its database customers -- "we should be in good shape," Prevo said.

Oracle"s plan to collapse the best of all three of its product lines into Fusion is the way customers want it to go, said Pat Dues, a project officer for the Las Vegas city manager"s office and president of the independent Oracle Applications User Group (OAUG). She said Oracle has indeed developed tools to automate and streamline upgrades; she saw evidence of that earlier this month when Las Vegas upgraded to Version 11i.9 of the Oracle E-Business Suite, from Version 11.03.

Using similar Oracle tools in the future, PeopleSoft or current E-Business Suite customers could rather easily upgrade to Fusion. "I don"t see why there should be a question as to the viability of the project," she said.

Analysts warned that it"s still too early to tell how the merger will play out.

Oracle executives know that rivals such as IBM Corp., SAP and Microsoft are sniffing around and looking to bag any unhappy customers, said James Governor, analyst at RedMonk Inc. a Bath, Maine-based consultancy. He urged PeopleSoft"s installed base of customers to start controlling the merger"s direction by driving hard bargains with Oracle and making sure everything the vendor promises is in writing.

"Now is a critical junction for the firm," said Governor. "It has paid good money for these customers, and every single one it loses will devalue that investment."