Oracle's Phillips talks up PeopleSoft integration

For the first time since closing a deal to purchase rival PeopleSoft Inc. for US$13.3 billion, Oracle Corp. Tuesday began offering a few specifics about how it plans to digest its acquisition and handle what will represent four different product lines.

In a conference call with reporters, Oracle Co-president Charles Phillips, widely seen as the point man on the merger, noted that the two companies are already in discussions on integration plans. Without giving much detail, Phillips said Oracle will continue to develop PeopleSoft's applications for the next 10 years, continue to develop the World product line and roll out a J.D. Edwards 6 as well as a PeopleSoft 9 suite.

As for J.D. Edwards & Co., which was acquired by PeopleSoft last year, "there are no plans to sell it off. There are a good 6,000 customers or so, and we know quite a bit about that market," Phillips said, referring to the midmarket.

In terms of the technology, PeopleSoft 9 would be "truly a PeopleSoft product under the technologies associated with them today," he said. "For the short term, 9 would just be another release of PeopleSoft with enhancements."

Over time, there would be enhancements to PeopleSoft 9. But Oracle also envisions porting functions over to its own E-Business Suite 11i, meaning the two product lines would "look more alike and it would make it as easy possible to migrate." The E-Business Suite eventually will become the more advanced set of the applications.

Oracle said it wants to keep the new customers happy. "As far as maintenance (of PeopleSoft customers) goes, we have to give good service and give them a reason not to look elsewhere."

He noted that PeopleSoft had a presence in the public sector, an area that is attractive to Oracle. And while there is overlap in the public-sector products of the two companies, Oracle doesn't have a federal payroll application -- the one from PeopleSoft might be absorbed into the E-Business Suite. Additionally, in areas where PeopleSoft has superior public-sector technology, Oracle would continue to extend the modules and add seats and make other enhancements.

What remains less clear is the effect of the merger on PeopleSoft's relationship with IBM Corp. -- a direct competitor to Oracle for software infrastructure dollars. In September, PeopleSoft and IBM announced a joint sales and development effort worth $1 billion over five years.

"We don't have a lot of details on the IBM contract," said Phillips." We're not that interested in adding more IBM to the stack. It's unclear what's been done. We have to take a look at that. Obviously, we have a strong application server we think is better. If (customers) need ( J2EE-enabled technology), they can use the Oracle Application Server. With the database, it's hard to say. I would surmise at some point there would be customers who perhaps are using PeopleSoft on DB2, and they'll end up with the Oracle product and database as well."

He expects there to be "substantial" opportunities for Oracle to upsell and cross-sell its business intelligence and analytic products, as well as its portal software.

As for personnel, the PeopleSoft deal will most likely lead to paring down the number administrative employees, though development and support staff should remain unchanged, Phillips said. "Operationally, we want to hit the ground running in January and have the organization in place by then. All this is happening fairly quickly, and we want to be ready to go."

PeopleSoft spokesman Steve Swasey deferred questions on the merger to Oracle. "We don't have the answers," he said. "We'll help out on key things. The employees will maintain the same level of integrity as long as we need to. We'll do whatever we have to to make the transition as easy as possible for the customers."

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