Analysts: Project Fusion Is the Death Knell for PeopleSoft Apps

Oracle CEO Larry Ellison says Project Fusion should make SAP shake in its pants, but analysts interpret the upcoming merged-companies product suite as being a sign that customers shouldn't count on sticking with PeopleSoft applications.

During Oracle Corp.s heartfelt and lengthy launch of the combined Oracle-PeopleSoft Inc. company on Tuesday, CEO Larry Ellison posed the upcoming Project Fusion as the product suite that will melt all the goodness from all the combined suites into one Internet standards-based Java platform that should make SAP AG shake in its collective pants.

"We think Project Fusion is what [SAP] should start thinking about," Ellison said during a press conference that followed 4 hours of official presentations. "Its process-oriented, using Internet standards [such as Java]. Thats not what they do. NetWeaver is a very immature applications server. … Suddenly they came onto our turf. If they really want to have their NetWeaver compare to our Applications Server, I cant wait to play the game. Thats what we do. Were the dominant middleware and applications server [vendor] on the planet."

/zimages/1/28571.gifClick here to read more about Project Fusion.

Perhaps, said one analyst; or perhaps Project Fusion is a large sign that customers should interpret as reading "Rethink that PeopleSoft application choice."

"One highlight [from the launch] is the focus on Fusion that says that the PeopleSoft customers have a big decision point around 2008 as to what they do with their product strategy, because, clearly, PeopleSoft 9 is a dead end," said Joshua Greenbaum, a principal at Enterprise Applications Consulting, in Berkeley, Calif.

"That isnt where you want to go, thats not where you end up," he said. "Youre going to want to be on a product base that has a real future. And by 2008, when the Fusion product is available, most customers are going to want to have a strategy for that time frame: what theyre going to want to do."

Paul Hamerman, vice president of enterprise applications for Forrester Research Inc., agreed that Oracle sent mixed signals on product support. "While they say these products will be supported until 2013, they also said theyll continue to follow the existing PeopleSoft support schedule, with some modifications," he said. "That means customers cant stay on current releases indefinitely. Various releases over time will be desupported, so customers will have to continue to upgrade applications periodically in order to be supported. Eventually, theyll be encouraged to migrate to the next-generation product."

Oracles road map includes completing PeopleSoft Enterprise 8.9 in 2005. The year after will see Oracle deliver Oracle E-Business Suite Version 12, PeopleSoft Enterprise 9 and EnterpriseOne 8.12, with continuing enhancements to be delivered "continuously," according to John Wookey, Oracles new executive vice president of application development.

In 2006, Oracle will also 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. Jeurgan Rottler, the new executive vice president of global product support, pledged support through 2013, along with extended support for JDE Enterprise XE and 8.0. PeopleSoft originally had been slated to cease support on Feb. 28.

In spite of Project Fusions sounding of the inevitable death knell for PeopleSoft applications, Oracle received high marks for its continued support of JDE applications. "They pushed it forward two years," Greenbaum said. "Theyre going to exceed the PeopleSoft support stand for XE. They made good on the promise they made at OpenWorld to err on the side of over-supporting. That made a lot of sense. Thats going to be very well-received."

Indeed, Greenbaum said, the extended JDE support could be seen as a positive bellwether as to interpreting what Oracle will do in coming years with JDE and PeopleSoft products.

Next Page: A lot of positive messages.