SAP Chips Away at Oracle Fusion Strategy

Opinion: Oracle competitor SAP is buying a third-party PeopleSoft support provider to build its own potential captive market.

Oracles competitors are taking the long view when it comes to waiting for their chance to get PeopleSoft and J.D. Edwards to switch to their products.

The end-game plan is already in place: Oracle has launched its Project Fusion strategy, in which it will continue to support PeopleSoft and JDE products until the technology is fully integrated into an Oracle product line by 2013.

But SAP has already launched a guerrilla war aimed at capturing the hearts and minds of PeopleSofts 13,000 customers, who certainly realize that they will have plenty of time and potentially plenty of incentives to make a shift to non-Oracle products over the next eight years.

One of SAPs first acts after Oracle managed to close its $10.6 billion buyout of PeopleSoft was to make a small acquisition of its own. SAP bought TomorrowNow Inc., a 60-employee company based in Bryan, Texas that provides third-party support for PeopleSoft and JDE applications.

/zimages/3/28571.gifClick here to read about Oracles own efforts to get SAP customers to move into the Oracle applications camp.

A majority of its employees are former PeopleSoft staff members and have experience supporting PeopleSoft or JDE ERP (enterprise resource planning) applications.

TomorrowNows CEO Andrew Nelson said his company can support these products for 50 percent less than Oracle typically charges and will support the products for a longer period of time—10 years from the current year as opposed to Oracles promised eight years based on its Project Fusion timetable.

The company is also offering to provide upgrades and fixes at the same level as customers would expect to get from the original software providers themselves. This includes major bug fixes along with required regulatory and tax code updates.

/zimages/3/28571.gifClick here to read about a study, conducted shortly after the Oracle buyout, showing that many PeopleSoft customers were willing to consider shifting to other ERP software products.

TomorrowNow is hardly the only company offering third-party support or outsourcing services for PeopleSoft and JDE applications. There are scores of regional or national companies providing such services. But how many of them are wholly owned subsidiaries of SAP, Oracles arch competitor?

TomorrowNow contends that its service provides decisive cost and other advantages that make it a strong alternative to the service available through Oracle and its Project Fusion upgrade path.

Next Page: Keeping customers close.

John Pallatto

John Pallatto

John Pallatto has been editor in chief of QuinStreet Inc.'s eWEEK.com since October 2012. He has more than 40 years of experience as a professional journalist working at a daily newspaper and...