Oracle's somewhat sketchy blueprint outlining its vision for PeopleSoft's products and customers drew a hopeful response from several users this week.
In a webcast open to PeopleSoft users, Oracle executives explained how the company plans to eventually integrate Oracle and PeopleSoft products in its effort to retain the PeopleSoft accounts it inherited.
Oracle also revealed its strategy for continuing to support and update PeopleSoft products. Officials said support programmes for most users will continue until at least 2013, long after Oracle expects to start shipping a new set of modular, Java-based applications, dubbed Project Fusion. Those products are slated to ship by 2008 and will combine the best of the Oracle and PeopleSoft technologies, according to Oracle.
During the webcast, Oracle chief executive Larry Ellison pledged that customers won't be forced off applications and that upgrades will be "fairly graceful."
Ellison said Oracle's support will "at the very worst be exactly the same as what PeopleSoft had. In many cases, we're lengthening the support."
In a further concession to disgruntled PeopleSoft customers, Oracle extended support for the former JD Edwards' OneWorld XE ERP package by two years. PeopleSoft had planned to halt support for that product next month.
"I have to admit to great surprise at the extension for two full years," said OneWorld user Robert Robinson, business systems supervisor at Durr Industries, an automotive supplier. He had been lobbying for a one-year extension. With this move, "Oracle just made a fleet of XE users very happy. It shows sensitivity to the needs of JD Edwards users," he said.
"Although I'd argue (that the XE support extension) was an easy decision, it does buy them a lot of goodwill from the OneWorld community," said Ken Meidell, CIO at outdoor specialty gear maker Cascade Designs, an XE shop.
Nevertheless, Meidell said he doubts Oracle can deliver on all the promises and schedules for Project Fusion while also pleasing customers and investors. Oracle's embrace of Java is problematic for Cascade, Meidell said, because the company has standardised around Microsoft's technology stack.
Nonetheless, while not enthusiastic about migrating to Fusion, Meidell says he may have to consider it unless SAP or Microsoft comes up with tools to make an ERP conversion as simple as a regular upgrade.
On the other hand, staying on OneWorld XE would also present challenges, since "I'm stuck with a system I'll eventually outgrow," he said.
"I'm on the path of cautious optimism," said Jim Prevo, CIO at Green Mountain Coffee Roasters, a PeopleSoft Enterprise shop. Prevo said he plans to keep using his applications but will be watching for new pricing and development policies. As long as Oracle doesn't start treating PeopleSoft customers like cash cows — as Prevo feels the company has done with database customers — "we should be in good shape," he said.
Oracle's plan to incorporate the best of the product lines into Fusion is good for customers, said Pat Dues, a project officer for the Las Vegas city manager's office and president of the independent Oracle Applications Users Group.
Oracle has indeed developed tools to automate and streamline product upgrades, Dues said, citing Las Vegas' smooth upgrade to Version 11i.9 of the Oracle E-Business Suite from Version 11.03.
Using similar Oracle tools in the future, Dues expects that either PeopleSoft or E-Business Suite customers should be able to upgrade to Fusion rather easily. "I don't see why there should be a question as to the viability of the project," she said.
Analysts warn that it's still too early to tell how the merger will play out.
Oracle executives know that rivals such as IBM, SAP and Microsoft are sniffing around and looking to win over unhappy customers, said James Governor, an analyst at consultancy RedMonk. He urged PeopleSoft customers to start controlling the merger's direction by driving hard bargains with Oracle and making sure they get all of the vendor's promises in writing.
"Now is a critical juncture for (Oracle)," said Governor. "It paid good money for these customers. Every single one it loses will devalue that investment."