Competitors may be circling the PeopleSoft customer base like hungry sharks, but users agree that even those companies that want to abandon new owner Oracle face rough seas.
This week, Microsoft launched an outreach programme aimed at convincing users of PeopleSoft's software to switch to its ERP and CRM applications. The programme includes financial incentives and consulting services.
Other vendors say they haven't started formal migration programmes, but users report that some are aggressively courting them. For example, an SAP spokesman said SAP has reached out to PeopleSoft users ever since Oracle announced its intention to buy the company in June 2003.
In an informal poll of 11 PeopleSoft customers, four of them said they would consider migrating to another vendor. For many users, the decision depends on whether Oracle can deliver on its promise to support and upgrade PeopleSoft's World, EnterpriseOne and Enterprise software lines.
PeopleSoft user Fred Pond, director of information services at Schnitzer Steel Industries, says he will be closely watching Oracle's actions over the coming months. But he acknowledged that even a decision to change would lead to a long conversion process.
If concerns arise over the next 18 months, Schnitzer will first assemble a team to consider a migration, Pond says. He is also president of the Quest International Users Group, which is made up of companies running applications from the former JD Edwards, now part of PeopleSoft.
If the team decided to switch, the process would be complex, requiring any new ERP system to be integrated with the steel company's other applications in addition to data conversion and personnel retraining, Pond says.
There's the rub for any user thinking of changing vendors. "There is a huge switching cost, almost insurmountable and unjustifiable unless you're on your knees and/or cannot complete a migration to your new ERP (system)," opined David Conn, director of corporate logistics at ladder maker Werner, a PeopleSoft EnterpriseOne shop.
"I think the ERP vendor owns you unless you don't care whether you stay on the upgrade path and are self-supporting," Conn said. "I can't imagine there are many Fortune 1000 companies who fit that profile."
In the absence of any specific plans from Oracle, PeopleSoft users are in limbo, said Robert Robinson, business systems supervisor at Durr Industries, an automotive supplier. Until Oracle makes its plans public, Durr can't determine whether a switch will be needed. Robinson noted that SAP and Microsoft are already "wolves at the door."
The city of Los Angeles, an Enterprise shop, will wait for the next several years to find out what sort of hybrid PeopleSoft/Oracle suite will be developed. "Depending on that outcome, we may upgrade or may evaluate other products, or we may just decide to ride it out until 2013," when Oracle says it will stop supporting the product, says Robert Jensen, assistant general manager of the city's Department of General Services. "You just can't rip out something that supports hundreds of mission-critical processes."
"I think that the disincentives for migration will keep a lot of PeopleSoft customers in the Oracle customer base for some time, even if the customer is looking for a way out," said analyst Joshua Greenbaum at Enterprise Applications Consulting.
On the support front, however, one company has already turned from PeopleSoft to a third party to maintain its PeopleSoft applications. Decorative Concepts, a maker of floral and outdoor decorations, agreed to switch last month in large part because of the Oracle merger, Bill Means, vice president of IT, said in an email. "I suspect a lot of people will be defected by this time next year," he said.
On February 2, Decorative Concepts' help desk and maintenance support responsibilities will be turned over to third party provider Klee Associates, Means says.