SAP Extends Grab for PeopleSoft Users

By Lisa Vaas  |  Posted 2005-04-04

SAP Extends Grab for PeopleSoft Users

In another move to attract Oracle customers, SAP has extended its Safe Passage Program to all users of J.D. Edwards and PeopleSoft applications.

SAP AGs Safe Passage program, which the company rolled out in January hard on the heels of Oracles PeopleSoft acquisition announcement, initially pertained only to SAP customers who also use PeopleSoft and JDE applications.

The program provided a discounted migration plan, allowing users to maintain their current PeopleSoft and JDE application support while migrating to MySAP ERP (enterprise resource planning). It was enabled by SAPs purchase of TomorrowNow Inc., a third-party maintenance provider for PeopleSoft applications.

SAP on Monday extended that program to more than 6,500 Oracle customers running PeopleSoft and JDE applications in the United States.

The rationale is to provide a "safe passage" to companies facing uncertainties caused by Oracles acquisition of, and subsequent integration of, PeopleSoft and its technologies.

That includes technology from JDE, which PeopleSoft acquired shortly before Oracle launched its long and aggressive campaign to purchase PeopleSoft in the summer of 2003.

"PeopleSoft and J.D. Edwards customers are facing the planned obsolescence of their software investment, and this is a major point of concern for companies that have already been forced to weather the takeover storm by Oracle," said SAP America President and CEO Bill McDermott, in a statement.

Under the program, companies running PeopleSoft and JDE will be able to move to SAPs NetWeaver platform. The program also includes maintenance, migration and support offered via TomorrowNow.

Upon launching the combined Oracle and PeopleSoft in January, Oracle outlined Project Fusion, the code name for a suite of products that will merge the best from all three product sets—Oracle, PeopleSoft and JDE applications.

Analysts say Project Fusion is the death knell for PeopleSoft applications. Click here to read more.

Oracle next year is slated to deliver the first Project Fusion components, including data hubs, which Oracle announced at Oracle OpenWorld in December. Project Fusion applications will follow in 2007, with the entire suite to be ready by 2008.

Read a Q&A with Oracle senior director of Customer Data Hubs Peter Heller here.

The second wave of SAPs Safe Passage Program will include an independent analyst report detailing the "considerable challenges" created by this integration, which will cover multiple tool sets, platforms, applications and corporate cultures, SAP said in its press release.

Analysts werent surprised by SAPs latest move. "I dont think [SAP] has anything to lose" by extending the program, said Paul Hamerman, an analyst for Forrester Research Inc.

Hamerman said that the initial program didnt result in much migration away from Oracle. "The switching costs are very high," he said. "A very high percentage of customers will stay with what they have, at least for the next couple of years, when they see what kind of transition choices they have with the Fusion release, and they can decide whether to go forward with Oracles transition path or look for another vendor."

But even if customers dont buy into a wholesale migration away from Oracle, many are still evincing interest in using TomorrowNow for maintenance without a full-scale migration, Hamerman said.

Next Page: Analysts say the move makes SAP an option for customers.

Move Makes SAP an

Option"> "Ive talked to a number of customers who are considering other maintenance options," Hamerman said, "[such as] PeopleSoft customers who are considering third-party vendors. A valid point made here in [SAPs] press release is, essentially, [regarding] Oracles development of future releases, a lot of customers may not use those future releases. They may just stay on the current release they have for an indefinite period. If support runs out, other vendors like TomorrowNow can support their retired releases."

Joshua Greenbaum, an analyst for Enterprise Applications Consulting, said that at the very least, SAP managed to cast itself as a viable option with the initial program and its recent extension.

"The program caught a lot of customers eyes, particularly the ones initially targeted: i.e., the ones with [SAP and/or PeopleSoft or JDE applications] overlap," Greenbaum said. "These are not necessarily trivial decisions, particularly for the ones not actively seeking a replacement; for those customers who are waiting out the storm.

"A lot of them have put this into the hopper, saying we need to think of this as one option. The initial program did what SAP could have hoped for: It got the conversation going and got them on the table as an option for the customers."

At any rate, its obviously a very aggressive move by SAP, Greenbaum said. "These two companies are clearly out to make each others customers as happy as possible. Theyll be very aggressive about it," he said. "At a minimum it ups the ante a bit and keeps the pressure on. And even if it impacts only a handful of people, in the long run it will have a disruptive effect on Oracle, and that is something that SAP likes."

Oracle had not responded to requests for comment by the time this story was published.

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