Migration Incentives

By Renee Boucher Ferguson  |  Posted 2004-11-01 Print this article Print

In addition to product and road map support, Oracle has announced that it would create a sort of super, combined product with the best functionality culled from PeopleSofts code base rewritten into Oracles E-Business Suite code base.

Analysts speculate Oracle would take advantage of PeopleSofts development in finance, human capital management, enterprise performance management, lean manufacturing, supplier relationship management and supply chain planning.

According to Oracles Phillips in his September letter, PeopleSoft customers would receive free module-to-module exchanges, along with free database licenses, if they chose to migrate to Oracles E-Business Suite "superset" in the event of a buyout. Oracle would then go to market with one set of applications—its E-Business Suite, officials said.

But for customers and analysts, the underlying infrastructure of both companies software is equally as critical as the products themselves. For example, Oracles applications are optimized for its own database and application server, while PeopleSofts applications are written with an abstraction layer to support a variety of platforms, primarily Oracle and IBM databases and Oracle and BEA Systems Inc. application servers.

Considering that nearly 40 percent of PeopleSofts 12,750 users are on non-Oracle databases (PeopleSoft doesnt release the number of customers running BEA application servers), the question becomes not which applications—but which infrastructures—Oracle would support.

Market watchers agree Oracle would have little desire to continue PeopleSofts strategic relationships with BEA and IBM. "We dont see those relationships being particularly strategic to Oracle," said Lee Geishecker, an analyst with Gartner Inc., in Stamford, Conn.

Added Metas Yockelson, "What we dont know is if Oracle would suddenly decide what support they will maintain, depending on what infrastructure is in place. It is an element of risk. There is no certainty they would support other infrastructures."

Part of the infrastructure decisions Oracle would face revolve around PeopleSofts third-party technology agreements, such as its $1 billion co-development deal with IBM announced in late September. This deal, many speculate, would be over with an acquisition, particularly given PeopleSofts plans to bundle WebSphere middleware into its applications. Analysts speculate that neither the IBM nor the BEA relationship would fit into Oracles long-term plans.

Click here to read more about PeopleSofts new technology alliance with IBM. "It is unlikely that Oracle would want to continue spending money on development to shift to an IBM platform," AMRs Shepherd said. "So, effectively, if this acquisition takes place, this deal is dead."

Officials at IBM, of Armonk, N.Y., and BEA, of San Jose, Calif., declined to comment on their plans should Oracle acquire PeopleSoft. Likewise, PeopleSoft officials declined to comment due to the speculative nature of the article.

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