Analyst and customers welcomed Oracle Corp.’s announcement that it will support PeopleSoft users, but now the company has to follow through on that promise in order to keep those customers.
Oracle CEO Larry Ellison, speaking before an assembly of customers and analysts at Oracle’s headquarters in Redwood Shores, Calif., said Oracle will keep over 90 per cent of PeopleSoft’s development and support organization. Oracle will continue to support and develop current and future versions of PeopleSoft and J.D. Edwards products. This includes completing work in PeopleSoft Enterprise 8.9, releasing Enterprise 9.0 by 2006, releasing J.D. Edwards Enterprise 8.12 by 2006, and support for PeopleSoft Enterprise, J.D. Edwards EnterpriseOne and World products to at least 2013.
“There was some concern in the press that we would cancel the entire PeopleSoft product line in 48 hours,” Ellison said. “We will support the PeopleSoft products for at least 10 years and we will enhance those products and improving those products for years to come.”
Andrew Albarelle, principle executive officer of The Remy Corp. in Denver, Colo., an HR company, said Oracle’s promise of long-term support is going to be the barometer if Oracle does not want to lose him and others in the future. “One of the golden rules of business is to under-promise and over-deliver,” Albarelle added. “I think Oracle is coming in with a promise, and this 10-year support plan is what they are looking to over-deliver with.”
The Remy Corp. is a long-time user of PeopleSoft’s solutions. The company plans in the next few months to upgrade to PeopleSoft Enterprise 8.9.
Overall, Albarelle was ‘happily surprised’ by what he heard from Oracle executives and is pleased that Oracle gave all indications of honouring PeopleSoft’s existing customer service and support commitments.
Ellison said Oracle will move quickly to combine PeopleSoft and Oracle support teams.
The combined teams will mean a support staff of some 6,000 people worldwide in 16 support global support centres.
“If you are a PeopleSoft or J.D. Edwards customer, you will be talking to the same people and getting the same support that you have been used to,” said Juergen Rottler, executive vice-president, Oracle Support and On Demand.
“When you call in you will see a lot of the same things that you have come to expect.
“On the road ahead, this brings an opportunity for us to bring Oracle’s support more closely together with J.D. Edwards and PeopleSoft support.”
Evan Quinn, global vice-president, applications software with IDC in Framingham, Mass. said Oracle is saying the right things about long-term support for PeopleSoft and J.D. Edwards products to assure its shareholders the monies and 18 months spent wooing PeopleSoft will mean that customers will stay with the newly merged companies.
This need to retain PeopleSoft customers has resulted in Oracle’s decision to support J.D. Edwards solutions that PeopleSoft acquired when it bought the company in 2003. There was talk amongst analysts and customers that Oracle might not get behind the J.D. Edwards products.
“If you went to Oracle World in December, the one thing that Oracle seemed confused about was J.D. Edwards,” Quinn added. “I think a little additional analysis was done and it was found that J.D. Edwards was strong in manufacturing,” he said.
“There was a reason why PeopleSoft bought J.D. Edwards and I think Oracle surprised many in the industry in treating the J.D. Edwards and PeopleSoft product lines and the Oracle E-Business line more or less as equals.”
While Oracle said the right things, Quinn believes Oracle’s real work is just beginning.
Analysts agree that Oracle has about a year to follow through on its support commitments and to assure PeopleSoft’s customers Oracle will be there for them. If there is no major loss of PeopleSoft customers to rivals, then Oracle will have succeeded.
Ellison admitted the protracted merger negotiations did create some confusion and uncertainty in the industry.
Now that the merger is finally complete, Ellison expects Oracle will be able to keep 95 per cent of PeopleSoft’s customers.
“There is a time frame [for when customers will] judge us and it may be longer that a year,” said Keith Block, executive vice-president with Oracle.
“A lot of that uncertainly is now gone,” he said.
“The companies are being put together and the control of PeopleSoft customers is now in Oracle’s hands.”
“I think the jury is still out,” said Glenn Marfell, president of the Northern California PeopleSoft User Group in San Francisco, Calif.
So far, Marfell said he is reassured by Oracle’s stated commitment to PeopleSoft’s support programs, and Oracle in recent weeks has been making a concerted effort to reach out to PeopleSoft customers and users through user groups like his own.
PeopleSoft’s Eastern Canada Regional User Group (ECRUG) is also is taking a wait-and-see attitude towards the merger.
Marie Sargent, president of ECRIG in Ottawa said the early signs seem good for PeopleSoft customers, as Oracle has been reaching out to ECRUG and its members in recent weeks to talk about the merger.
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