PeopleSoft Users Weigh Risks
of Oracles Rapid Growth">If Oracle is successful in its attempt to acquire BEA Systems, it will be the companys 37th acquisition since 2005, when it began its buying spree with the takeover of PeopleSoft. While Oracle isnt the most acquisitive company in the software pantheonIBM and Infor have bought nearly as many companies in the same time frameOracle is by far the most tenacious in its approach. But outwardly it also takes a highly conciliatory approach to its acquired customer bases. After early hints that it would acquire PeopleSofts customer base and then kill the software, Oracle had a lot of customer fears to quell. And quell it did with an offer for unlimited applications support for PeopleSoft and JD Edwards users. But some PeopleSoft customers are expressing concern about Oracles service quality. And this is raising questions about whether Oracle is as successful as it claims about integrating its many acquisitions. The situation with PeopleSoft could be a barometer for how BEA customers would fare under the Oracle aegis."We feel like there is risk in moving forward with PeopleSoft and were trying to asses that risk," said George Muller, vice president and CIO at Imperial Sugar in Sugar Land, Texas, who is weighing an upgrade to PeopleSoft Enterprise 9 recently released by Oracle. "From my perspective there are a number of companies that have abandoned PeopleSoft and have gone in other directions." An active member of a number of PeopleSoft (and now Oracle) applications user groups, Muller said that he has seen a drastic reduction in the number of companies represented by at least one organization, Distributors and Manufacturers Users Group, that bills itself as a "product-specific users group comprised of all PeopleSoft customers that have licensed a PeopleSoft Distribution, Manufacturing and/or Supply Chain Product," according to the groups Web site. In April 2005, Muller said there were approximately 150 companies represented at DMUGs annual meeting in New Orleans. By October 2006, the group had dwindled to half, or about 75 companies represented. "In a year and a half what I witnessed was a 50 percent drop off in participation," said Muller. "Theyre either holding their own or they are going someplace else." At the October 2006 meeting, Oracles PeopleSoft group made a pitch to the DMUG membership that amounted to "were back," according to Muller. "Why would you have to sell that to me if youre really back, rather than demonstrating to me that youre back by making phone calls to me, by reaching out proactively to me, by addressing issues when I call the help desk?" said Muller. "When you step back and look at the acquisitions Oracle has made how does any one organization absorb that much and still execute and service the customer?" Steve Canter, CIO of Berlin Packaging and the current president of DMUG, said that while he has seen as good or in some areas improved customer service under Oracles watch of PeopleSoft applications, he believes the functionality upgrades are not what they used to be. "One of the things we are seeing is in many of the applications lines there is not as much going on in terms of product feature enhancements as there once was," said Canter in Chicago. "PeopleSoft had decided after the JD Edwards acquisition that they were going to put more marketing behind the JD Edwards linefor manufacturersso as a result, if they were not going to be leading with PeopleSoft on their go-to-market strategy then there was not as much incentive to make enhancements," Canter said. Oracle appears to be continuing this trend with some of the other product lines, Canter said. Page 2: PeopleSoft Users Weigh Risks of Oracles Rapid Growth
Read more here about Oracles efforts to buy BEA Systems for $17 per share.