SAP announced the purchase of PeopleSoft third-party support provider TomorrowNow last week with in-your-face timing: The announcement came a day after Oracles splashy, day-long launch of the newly combined Oracle-PeopleSoft. At the same time, SAP announced a migration program, named Safe Harbor, aimed at letting users maintain current PeopleSoft and J.D. Edwards & Co. applications while migrating to MySAP ERP.
Ellison delivered the warning during Oracle Analyst Day Wednesday in New York, in which Oracle forecast aggressive growth for the coming fiscal year.
The Redwood Shores, Calif., database giant forecast pro forma earnings per share growth of 24 percent in fiscal year 2005—a figure far exceeding the 15 percent annually compounded share growth that President Jeff Henley had presented to Oracles board of directors when he laid out a five-year plan for Oracle, assuming no acquisitions, a little over a year ago.
Analysts weighed in on Ellisons warning to SAP. "[It was] a sort of a warning, a shot over the bow in terms of third-party support: what we see as the potential market opening up for third-party maintenance, for companies who feel theyre paying too much," said Paul Hamerman, an analyst for Forrester Research Inc. "Ellison sought to intimidate vendors who want to get into third-party maintenance business, because of the potential issues around the use of source code."
Katherine Jones, an analyst at Aberdeen Group, noted that options for third-party support are springing up in the wake of the acquisition, with the market being flooded with support professionals from J.D. Edwards, for example.
"People who are very skilled in support for JDE are entering the market with a value proposition thats different from other skills that are out there," she said. "That represents alternatives and choices for the installed customer base [that Oracle acquired]."