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Oracle Courts PeopleSoft's iSeries Users

Analysis of News Events
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Over the last two weeks, Oracle Corporation has taken pains to assure PeopleSoft's World and EnterpriseOne customers that it will support them on the IBM hardware and software products that they currently use. While the assurances demonstrate how important these customers are to Oracle, they also indicate that those customers have more bargaining clout with their new vendor than they might have imagined.

Oracle issued its most explicit statements of support last Monday when Charles Phillips--the company's president--held a town hall meeting for PeopleSoft customers. During the meeting, Phillips revealed that Oracle has already asked IBM for help in supporting its software running on the company's iSeries servers. As Phillips put it, "We expressed to [IBM] that we intend to aggressively support that product line, and they were happy to hear that, and they want that to happen as well for obvious reasons." While Phillips did not say whether IBM and Oracle have signed a support agreement, he did say that he expects no serious issues in working with IBM or other vendors.

In addition, Phillips said that Oracle is porting its database to the iSeries and expects to release the product shortly. According to sources that are close to the company, Oracle Database 10g will likely run on both Linux and AIX logical partitions of the iSeries. Phillips also said that Oracle will maintain distinct development and support organizations for PeopleSoft's product lines, including those for EnterpriseOne and World. This is a positive development for iSeries customers, as it means that they should enjoy continuity of support from the PeopleSoft teams with which they already work.

To underline Phillip's comments, Oracle also posted a list of its commitments to the PeopleSoft community on the Web site of Quest, the international user group for World and EnterpriseOne customers. The document includes the following statements:

  • Oracle declared that it will provide "long-term support options" to EnterpriseOne and World customers. While the vendor did not define what "long-term" meant, it indicated that support levels would be similar to those for PeopleSoft Enterprise, which the company has pledged to support for 10 years.
  • Oracle stated that it will work with other relational database vendors, including IBM and Microsoft, to support EnterpriseOne and World customers on their existing databases. The software vendor also said that the support would continue "as long as a working relationship can be maintained."
  • The company expects to enhance PeopleSoft Enterprise and EnterpriseOne along the lines that I discussed in my article last week. Oracle also pledged to create a "successor product" that combines the best features of Oracle and PeopleSoft's ERP applications on an Oracle middleware base. All PeopleSoft customers will be able to exchange their existing application modules for the successor product's similar modules at no charge.

In addition, Oracle has indicated to Quest's directors that it wants to work with the user group as the unified voice for EnterpriseOne and World customers. If Oracle does so, it would represent a resurrection of sorts for Quest. Over the last 18 months, PeopleSoft has largely ignored the association and refused to send executives to its conferences. By contrast, Oracle's statements signal a willingness to listen to an organization that is an independent voice for iSeries users.

A Motivated Buyer

It may surprise many World and EnterpriseOne customers that Oracle is making such overtures to its newly acquired iSeries customers. After all, Oracle has never had a reputation for listening closely to customers and taking pains to meet their requirements. Then again, Oracle has never spent $10 billion before to acquire a company. That price tag gives the company a powerful incentive to give PeopleSoft customers the kind of support that leads them to renew their maintenance contracts and upgrade their software.

Oracle will need every dime from those transactions to recoup its acquisition costs, and it knows that it will have to work hard to win over many customers. After a bruising takeover battle, many PeopleSoft customers have a very negative image of Oracle. Moreover, with companies such as Klee Associates, TomorrowNow, and Versytec offering cheap maintenance alternatives for World and EnterpriseOne, Oracle must demonstrate that it has a strong partnership with IBM that justifies its higher support prices.

In short, Oracle has every reason to treat its EnterpriseOne and World customers well. If you are one of those customers, I encourage you to have an open mind about the company. I also encourage you to join Quest if you have not done so already and work with other user associations to communicate your concerns and requirements to Oracle. Of course, you may also want to entertain an alternative maintenance proposal from one of the providers listed above. However, be aware that Oracle will likely work hard to make its maintenance offerings worthy of your consideration. If those offerings come with the blessing and backing of IBM, they will probably be the best deals for most EnterpriseOne and World customers.

Lee Kroon is a Senior Industry Analyst for Andrews Consulting Group, a firm that helps mid-sized companies manage business transformation through technology. You can reach him at This email address is being protected from spambots. You need JavaScript enabled to view it..

LEE KROON
Lee Kroon is a Senior Industry Analyst for Andrews Consulting Group, a firm that helps mid-sized companies manage business transformation through technology.
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