SAP Canada swoops in on PeopleSoft users

In the ERP market, timing can be everything. And shortly after Oracle Corp. officially announced it is now a newly merged company, SAP AG quickly countered with a new maintenance and migration service — dubbed Safe Passage – targeted at its customers that are also running PeopleSoft Inc. and J.D. Edwards & Co. (JDE) applications.

Oracle confirmed last week it would continue development on PeopleSoft Enterprise 8.9 and 9.0 and J.D. Edwards products and also update its own Oracle E-Business Suite to tie together the disparate applications.

Oracle also detailed a Project Fusion initiative to ultimately develop a Java-based, service-oriented architecture applications suite as a migration point for its Oracle, PeopleSoft and JDE products. The Fusion suite, slated for a 2008 release, would offer an automated upgrade process from all three lines, according to Oracle.

But according to SAP Canada’s head honcho Bob Courteau, as Oracle tries to integrate its distinct apps, SAP continues to push its “best-of-suite” applications in the Canadian marketplace.

“I don’t think that Oracle will be able — until 2008 — to pull all those things together,” Courteau told IT World Canada. “We don’t have the burden of trying to integrate multiple application sets.”

In the interim, according to Courteau, SAP is primed to provide Canadian customers with a viable alternative to Oracle. As Oracle attempts to integrate its product lines, Courteau said, the “customer-centric” SAP Safe Passage initiative recognizes that some users would be concerned about a clear product roadmap during the transition.

In Canada, there are many companies running mixed IT environments, Courteau said. The Safe Passage program targets PeopleSoft and JDE users that also have SAP in their IT infrastructures and are seeking to standardize, he added.

Courteau noted that SAP’s recent acquisition of Bryan, Tex.-based PeopleSoft support firm TomorrowNow Inc. will help in providing maintenance, support and NetWeaver integration.

The program provides a licence upgrade to SAP’s flagship mySAP ERP software and also offers a user licence for the SAP NetWeaver integration and application platform, which already features JDE and PeopleSoft enterprise application integration (EAI) connectors. “NetWeaver can deal with integration issues,” Courteau said.

Users choosing to move to mySAP ERP will receive a 75 per cent “licence credit” on their investments in PeopleSoft and/or JDE software products, Courteau said, adding that this would include support and maintenance services during the transition. The maintenance packages include bug fixes as well as support for compliance requirements, SAP said.

According to Boston-based IT research firm AMR Research, while the newly merged Oracle-PeopleSoft would be a formidable US$5.5 billion enterprise applications provider, SAP would remain the largest ERP vendor. AMR said users may find the vendor consolidation opportunity and licence trade-in credit very attractive, even if they are in no rush to migrate.

One industry observer cautioned users that it’s still too early to tell how the merger will play out. James Governor, principal analyst with Bath, Me.-based Red Monk Inc. said Oracle executives already recognize that their company’s competitors — including SAP, IBM Corp. and Microsoft Corp. — are looking to land unhappy Oracle users.

Governor suggested that current PeopleSoft users can control the merger’s direction by driving hard bargains with Oracle, and making sure everything the vendor offers is in writing. One key issue here will be services, Governor said. Users should avoid discounted software without discounted services, and they should seek out fixed cost deals.

We’re set to see some discounting in the application and infrastructure markets, Governor said, adding that enterprises should take this as an opportunity to “drive vendors crazy with tough negotiating. Vendors should bear costs of migration — if they want to play let them pay.”

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Jim Love, Chief Content Officer, IT World Canada

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