PeopleSoft Declines to Scrap With Oracle at Quest Users Group Conference

By Lisa Vaas  |  Posted 2004-02-16

PeopleSoft Declines to Scrap With Oracle at Quest Users Group Conference

In an effort to answer customer concerns about the Oracle-PeopleSoft takeover, Quest, a non-profit J.D. Edwards users group, has invited both Oracle Corp. and PeopleSoft Inc. executives to address its Quest West user conference, which takes place Feb. 29-March 2 in San Diego.

Oracle President Chuck Phillips has accepted the offer and will address the user group on March 1 at an as-yet-undetermined time, according to an Oracle spokeswoman.

In keeping with the rocky relations between PeopleSoft and the user group, the company has not taken the group up on the offer. The reason, according to Steve Swasey, a spokesman for PeopleSoft, of Pleasanton, Calif., is that the forum is all wrong as a venue. "Were not going to participate," Swasey said. "Theres no need to get into a tit-for-tat with Oracle. Its not the right venue, its not the right place, and its not the right time."

Relations between PeopleSoft and Quest soured over the past few months as the two have played tug-of-war over questions of who will run and support which conferences. According to Barb Schmit, Quest president and CIO of CNT, a solutions provider based in Minneapolis, much of the strain in the relationship boils down to incompatible cultures—i.e., the midmarket culture traditionally associated with J.D. Edwards customers, as opposed to the large enterprise market that forms a large percentage of PeopleSofts user base.

"Its difficult when you go into a room full of people, and youre talking about product differences and trying to identify weaknesses within products that need to be addressed on a go-forward basis, and youre maybe a 1,000-employee company, and youre talking to somebody with maybe 50,000 employees," she said. "The question is, Do you have a big voice? Thats where the difference is between the midmarket and the enterprise. I understand its difficult to integrate [two companies and product sets]. Its difficult and costly to maintain two sets of software. But theres clearly some difference between the midmarket and the enterprise."

Next page: Questions from J.D. Edwards customers.

JDE customer concerns

J.D. Edwards customers, understandably enough, have many questions to put to both Oracle and PeopleSoft. In the event that Oracles bid is successful, they want to know whether Oracle will value and continue to support J.D. Edwards software. Oracle CEO Larry Ellison has changed his tune on the question multiple times.

"[From the press,] we get everything from Oracles going to kill off support of JDE and wont provide development, … to No, well support the software moving forward, to Well support it moving forward for a period of time," said Mark Federle, CIO of The Weitz Co. Inc., a Des Moines construction company, and a Quest member. "All those pieces obviously impact if I should upgrade my current investment in JDE, because thats planned for 60 days from now. If the software ultimately isnt going to be supported in a short period of time, it would be illogical at best to make those investments."

Quest members overwhelmingly support staying with PeopleSoft ownership over a successful Oracle takeover: Eighty percent of members who responded to an online poll in June were in favor of the PeopleSoft merger. Since then, however, some members, such as Federle, have found much to criticize in PeopleSofts ownership of J.D. Edwards.

"Thusfar, what [PeopleSoft] seems to indicate is that all [certain] services are being provided already," said Federle. "If that was true, PeopleSoft would offer regional conferences and Web sites that arent administered by their own folks—al of which are not currently being offered. PeopleSoft wouldnt indicate those items are free when Im paying multiple hundreds of thousands of dollars for maintenance, of which most of what I get is software updates. … We dont have a lot of application questions, and when we do, we tend not to get our problem fixed. We get told, … Buy more product, or Yes, thats a known error, and well fix that later."

Next page: Will Oracle spin off JDE post-successful takeover?

Will Oracle spin off

JDE?"> Meanwhile, rumors abound about the possibility of Oracle spinning off J.D. Edwards as a separate company post-successful takeover. Such rumors get their fuel from the fact that most J.D. Edwards customers run on IBM databases. In addition, such a move could potentially help Oracle satisfy U.S. Department of Justice concerns about anti-trust violations.

Federle said that hell attend Quest West if only to hear Oracles Phillips talk for 15 minutes about such matters. "Id rather be doggone smart about how those decisions will affect my planning for the next year," he said. "I need to go before my board and say OK, heres what my approach will be. [I need to] look like a strategic thinker in front o the people who want to see a strategic CIO, lest they go out and find a new one."

Federle would like to see PeopleSoft on the carpet as well, to find out what the company is doing from a planning and tactical perspective to protect the ERP (enterprise resource planning) investments of its J.D. Edwards customers.

PeopleSoft is indeed participating in user group conferences, Swasey said—just not this one. "Already, weve participated with the Southern California regional user group, and several others, with more than 500 people in attendance," he said. "By the end of the quarter we will have participated in more than 35 user group meetings with approximately 2,000 people in attendance at those meetings. Were clearly moving ahead with a strong user group model which is designed by customers and for customers."

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