PeopleSoft Customers Wary of Oracle Takeover

By Lisa Vaas  |  Posted 2003-07-17

PeopleSoft Customers Wary of Oracle Takeover

If Oracle Corp.s Town Hall meeting on Thursday managed to lull the fears of any PeopleSoft Inc. customers, those customers kept mum about their newfound ease.

The uncomforted, however, did not.

"[The merger] will cost us money, bottom line," said a Human Resources systems manager in San Jose, Calif., who requested anonymity.

Like other PeopleSoft customers, he said he just doesnt swallow Oracles promise that the Redwood Shores, Calif., database company would keep up development of PeopleSoft products following a successful takeover. "I dont believe it for a second," he said. "[Those promises] could mean anything. That could mean some little token development, just so [Oracle CEO Larry Ellisons] not lying. Theyre not going to put the development dollars into something thats just going to go away."

Bobby Ho, another Human Resources systems manager, from Ricoh Electronics Inc., in Tustin, Calif., echoed those concerns. "My biggest concern is—I wouldnt say integrity, but the issue around upgrades and supporting of PeopleSoft products," he said. "Initially Oracle said Hey, were not going to support [PeopleSoft products], were going to integrate PeopleSoft. Now theyre saying theyll support it up to 10 years. How will they support it? On this current technology, it will be obsolete."

The anonymous user concurred, saying that PeopleSoft products fate post-merger would be to wither on the vine. "What do you do with products you dont develop that have the same software in 10 years? Thats where I see Larry putting it. The shelf life on systems and applications is probably two to three years at best. To just support it for 10 years is probably the worst thing he could do. Im sure hed be delighted to see PeopleSoft die a slow death."

Indeed, Oracle Executive Vice President Chuck Phillips encountered the same concerns during the online Town Meeting, which was the first of a series the company plans to hold. His response was, in essence, that Oracle will develop PeopleSoft products to the extent needed to keep customers happy.

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Ho isnt convinced. "Its the same script. Its everything Ive heard before," he said. "They say theyll develop point releases, but how realistic is that? Theyre got [Oracle11i], theyll want to bring people to the Oracle database and applications. Theyd have to have two separate support organizations, two product development areas. They synergy would be to bring together the two. I highly doubt theyll support both. Whenever any software company buys another software company, you integrate the technologies eventually so you dont have the redundancy in all the organizations."

Ricoh Electronics is a Microsoft Corp. SQL Server shop. Its financial system runs on J.D. Edwards & Co. software, on IBM AS/400 machines. If push comes to shove and Oracle fails to adequately support its competitors databases following a merger, the company would likely evaluate other applications beside J.D. Edwards, Ho said, but the database would be a constant. "Wed migrate the application, because the database isnt the issue," he said. "[Oracles database] is so much more expensive than SQL Server."

Customers were also unhappy with the idea of being forced onto an applications suite they view as being far inferior to PeopleSofts. For Ho, the issue is how a given vendor handles the higher-education sector. "PeopleSoft is strong in Student Administration, and Oracle doesnt have a solution to that," he said. "Thats a big complaint of most customers or people in the higher-education groups."

The anonymous HR systems manager had a longer laundry list of whats missing from Oracles applications. "Position control wasnt good [when we evaluated Oracle applications]," he said. "Flex salary wasnt there. Benefits area was weak. Data-entry processes for mid-year increases and health-care reimbursement was weak. Vacation-buying premiums was weak."

Indeed, PeopleSoft customer outrage at the idea of a shotgun wedding reaches down to a gut reaction against whats perceived as the squelching of competition and the American way of life. "Not to get too motherhood and apple pie, but its almost un-American to limit the choices when clearly we need multiple choices," said the anonymous user. "We dont need just one or two vendors we have to go to to get our needs met. Eliminating choices smacks of antitrust issues. The Department of Justice needs to take a strong, hard look at this. It isnt right. It just isnt a good thing for the industry."

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