ERP Friction Leaves Users Cold

Discounts abound, but paths for migration are not so ample.

While enterprise software titans spar over customers in the wake of Oracle Corp.s PeopleSoft Inc. acquisition, offering a dazzling display of discounted migration packages, users are taking a cautionary approach to shifting application vendors.

Among the key rivals, Oracle and SAP AG remain several years away from a mature technology stack offering, and Microsoft Corp., for many users, does not have a suitable option. The dearth of real alternatives and a desire to protect their investments has many former PeopleSoft and J.D. Edwards & Co. customers staying put with current implementations, despite the lure of deep discounts .

"We have a pretty substantial investment here [with JDE]. You dont move on a dime for the type of infrastructure you already have," said Jim Whalen, CIO of Boston Properties Inc., in Boston. "[Other vendors] might get some play from companies on the edge, but the core customer is going to be very thoughtful about changing."

In a 4-hour series of executive speeches last week, Oracle officials committed to supporting PeopleSoft and JDE software until 2013. Officials said Oracle will upgrade current versions of PeopleSofts Enterprise and EnterpriseOne suites and develop the next iterations. The Redwood Shores, Calif., company also promised a next-generation suite, Project Fusion, which will include the best functionality from PeopleSoft, JDE and Oracle E-Business Suite.

But its the challenges with Fusion that could force some users to consider migration: The new technology will not be available until 2008, and Oracles infrastructure commitments are unclear. Although the company said it will support IBM and Microsoft databases and BEA Systems Inc.s application server through 2013, it is unclear if that extends to Fusion.

/zimages/2/28571.gifAnalysts say Fusion will be the death knell for PeopleSoft applications. Click here to read more.

The merged tool will be written in Java, using J2EE (Java 2 Platform, Enterprise Edition), to enable integration with outside applications, said Oracle CEO Larry Ellison, who announced the companys move toward a more open environment last year. But even with that effort, Oracles E-Business Suite still runs only on the companys database and application server.

SAP, meanwhile, responded to the combined Oracle and PeopleSoft—now the second-largest enterprise software provider in the world behind SAP—with a program to lure PeopleSoft and JDE users. The Walldorf, Germany, companys Safe Passage migration program includes ongoing support for PeopleSoft and JDE applications under TomorrowNow, a third-party maintenance provider that SAP acquired last week, while users migrate to MySAP ERP. The lure of MySAP, even to longtime R/3 users, is largely SAPs NetWeaver integration platform.

However, while SAP boasts 1,500 NetWeaver users out of its 20,000-plus customers, the technology still has far to go until it can be fully used by MySAP users. Complete componentization of applications—a necessary part of fully enabling NetWeaver—will take two more years, SAP officials have said.

Microsoft, for its part, currently has no suitable offering for the bulk of PeopleSofts enterprise customers. The Microsoft Business Solutions ERP (enterprise resource planning) offerings are aimed at the small and midmarket sectors.

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