Oracles Project Fusion: Just a Leap of Faith?

By Lisa Vaas  |  Posted 2005-02-23

Oracles Project Fusion: Just a Leap of Faith?

Project Fusion: Its supposed to glue together PeopleSoft Inc., J.D. Edwards & Co., and Oracle Corp. business applications. Its supposed to soothe the frazzled nerves of PeopleSoft and JDE users whove been scared silly that theyll be forced to emigrate onto Oracle systems. Its supposed to tie it all together with a data-hub bow to present one unified enterprise view of customers, suppliers or partners.

Sounds nice. Is it real?

Oracle Senior Vice President of Applications Development John Wookey was on stage last week at the AMR Research-sponsored Strategy 21 conference on enterprise applications in Burlingame, Calif. His message: Project Fusion is on track for 2007 and 2008 delivery.

And its being worked on by a stunning number of retained PeopleSoft developers: Oracle managed to retain 99 percent of developers and technical support staff to whom the company mailed job offers on Jan. 14, Wookey said—and, in fact, Oracle wound up making offers to more than 90 percent of PeopleSofts support and development staff.

In other words, the company swallowed PeopleSofts tech brains in one big gulp.

AMR Research analyst Bruce Richardson was on stage with Wookey with a list of some 50 questions in his hand and was responsible for getting all these details. Database Editor Lisa Vaas caught up with Richardson to get his take on Project Fusion and to find out how the future looks for JDE and PeopleSoft customers.

Should the Project Fusion update be comforting to PeopleSoft and JDE customers?

I think the message for customers is very reassuring: You dont have to do anything for a few years. If you dont want additional functionality, just pay a maintenance fee. When youre ready to do something, [Oracle will] have a bold new architecture for you.

Thats not what SAP AG would have them believe, though, what with its migration program…

Some competitors are saying, "JDE and PeopleSoft users, Oracle will make you go to 11i, then youll have to do reimplementation, then youll have to go to the new Fusion Project," and thats not the plan at all, as it turns out.

Migrating off an ERP [enterprise resource planning] platform is brutal, so I can imagine how scary that prospect could be.

If youre an ERP customer and youve been through the [migration] project once, theres an excellent chance it took a lot longer than you thought and cost a lot more than you budgeted. If they thought theyd have to rip out everything you have, it would drive users to an industry that doesnt require ERP software.

Next Page: Nobody wants to spend three years migrating ERP systems.

Migrating ERP Systems

With large companies, these implementations have gotten so big. One customer said he was looking at an upgrade. SAP said the new upgrade will cost you $1 million in additional licenses. That doesnt sound bad—[the customer] looked at the new software and could identify $10 million in value [it would add]. But it would take two years to do the implementation and cost more than $75 million.

So what you have now is large companies saying, "When I first put in ERP, having everything on one system was a huge advantage. Now these huge systems are limiting innovation." …

[Suppose] SAP or Oracle comes out with a new release. No one wants to be the first to do the upgrade. You want to find out when other people have done it. Interim releases for bug fixes and missing functionality can take a year or longer.

Then in the second year, if I use this, how will I have to change concurrent software? Training for employees? The second year is just planning the implementation. Then the third year is going live.

If something is going to take three years, people want to do that less and less.

Project Fusion: Is that something thats going to make a painful migration worthwhile?

[One aspect of Fusion] is the notion of a data hub: one place where you can go and [access the] whole enterprise and find the system of record or master record for a customer, supplier, employer or whatever. Imagine youre a customer of the Bank of America. If you have a mortgage loan, bank account or something else, theyre all in separate databases. Information about you is stored all over the place. Oracle is talking about cleaning up that [mess]. … SAP calls it master data management. …

[Wookey] talked about the notion of transaction bases: having one place [in health care, for example,] where all information about me as a patient is stored, and then being able to … write your own software on top of that. Maybe as a patient-tracking system, or an extension to a billing system. The notion is that youd have data objects like customer, employee or supplier, and then certain business processes that sat on top of your ERP system.

But its like all this stuff is in the conceptual stage. You cant describe how a customer will use it, because there are no customers yet. Were in the LOF—the leap-of-faith stage.

Next Page: Oracles retention of PeopleSoft tech staff shows cultural similarity.

Oracles Project Fusion: Just a Leap of Faith? - Page 3

As soon as you talk Project Fusion or SAPs Enterprise Services project [which is SAPs blueprint for service-based, enterprise-scale business solutions that offer the increased levels of adaptability, flexibility, and openness required to reduce total cost of ownership], were talking three years away, minimum. Were at least six years away from live implementations.

How about that figure Wookey dropped, about successfully hiring 99 percent of the PeopleSoft developers and technical support staffers it targeted?

I was surprised. Just because the animosity at the executive level was so high. Many of the PeopleSoft executives at vice president level and above got lucrative packages to walk away. At the very top they got two years salary.

So there were a lot of distraught people. This cool little company they worked at 10, 12 years was suddenly gone, and there was nothing they could do to save it. The question was, how far would that trickle down to support staff?

But away from the [former PeopleSoft CEO and President Craig] Conway and [Oracle CEO Larry] Ellison level, their cultures were very similar. They were both very aggressive on the sales side, and on the technology side, they were both very interested in next-generation technology, always wanting to do the cooler thing.

If [PeopleSoft founder] Dave Duffield decided to start another company in a completely related market, what percentage of that developer staff would say, "Im ready if you want me?"

There was a feeling that Dave would do something. But he just made about $600 million on this transaction. Hes in his 60s. Im not sure he has to prove anything. If I had $600 million, I wouldnt be sitting in a hotel room in the lovely little ski town of Wiesloch [in Germany], getting ready to go visit SAP.

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