Study: Many PeopleSoft Users Inclined to Ditch Software Post-Merger

Recent research shows that many PeopleSoft organizations are inclined to bail on the software following the merger with Oracle-particularly those who use CRM products from PeopleSoft.

Post-merger, Oracle Corp. has PeopleSoft customers in the palm of its hand—or does it?

Recent research from The Yankee Group shows that a sizable portion of PeopleSoft organizations report that theyre inclined to bail on the software following the merger—particularly those who use CRM (customer relationship management) products from PeopleSoft.

Out of 162 PeopleSoft customers surveyed in December and in January following Oracles announcement that the deal was a go, 46 percent reported a propensity to switch off their current applications, with another 30 percent remaining undecided.

Product functionality is not whats worrying PeopleSoft customers. Survey respondents reported above-average levels of satisfaction with, for one, their supply chain software functionality, for example. SLAs (service-level agreements), however, are a primary concern. "Oracle could seriously mess up if they dont do well in keeping customers happy in the short term with SLAs," said Sheryl Kingstone, one of the Yankee Group analysts who authored the report.

The surveys findings may strike Oracle competitors SAP AG, Siebel Systems Inc. and Microsoft Corp. as being good tidings. Indeed, the Yankee Group stressed in its report, "What the Future Holds for PeopleSoft Organizations," that Oracle must work hard to assure its new customers that it will nurture, support and develop PeopleSoft technology—particularly J.D. Edwards applications.

At the same time, Oracle itself is far and away PeopleSoft users No. 1 alternative brand, with 52 percent of respondents reporting that they would consider Oracle to be their foremost option were they to switch. SAP came in with 36 percent, Siebel at 22 percent, Microsoft Great Plains at 17, Microsoft Navision at 12, Lawson Software Inc. at 9, Sage/Best Software Inc. at 7, Geac Computer Corp. Ltd. at 6 and SSA Global Technologies Inc. (BPCS)/Baan at 5.

Still, CRM is a major concern for Oracle, the Yankee Group found. Thirty percent of PeopleSoft CRM customers said they would be somewhat likely to switch their software, and 17 percent said they would be very likely. Only 23 percent of PeopleSoft CRM users said they were very unlikely to switch, while the balance reported that they were still undecided.

A sizable chunk of PeopleSoft HR customers were likewise spooked by the turn of events, with 29 percent reporting they were somewhat likely to bail following the merger, 17 percent saying they were very likely, and only 31 percent reporting that they would stay put.

When it came to users of the entire PeopleSoft ERP (enterprise resource planning) suite, 25 percent reported being somewhat likely to change software. Eighteen percent said they were very likely, and 25 percent were very unlikely.

Right now, Oracle is focusing on the Project Fusion architecture, for which it promises it will cherry-pick and integrate the best of all its newly acquired technology. Oracle is working to base the resulting technology platform on Java and open standards, which is a "great foundation," Keystone said. Still, much of the application layer will have to be rewritten to bring about the desired end result. In the meantime, functionality thats near and dear to customers hearts may well end up on the cutting-room floor.

Next Page: Customer Data Hubs will be a crucial underpinning of Project Fusion.