R/3 Orphans-to-Be Contemplating Jumping Ship

With SAP shutting off support for 4.6C and older versions of its R/3 ERP platform, users face a decision: Should they upgrade or migrate to Oracle's Project Fusion?

SAP AG still has thousands of users on its R/3 ERP platform. Under a licensing structure introduced last year, dubbed 5-1-2, those users on 4.6C and older systems are facing either a maintenance shutout or a potentially significant support fee hike by the end of next year—a deadline that looms current for those users.

Faced with impending changes in their system support plan, many users are upgrading to SAPs newer platforms—Enterprise 4.7 or mySAP 5.0 (also known as Enterprise Central Component 5.0). However, others are taking a wait-and-see approach, particularly in light of recent shifts in the enterprise resource planning landscape.

"SAP is trying very hard to get legacy R/3 users migrated over. They dont want to be in a position where we have a dead piece of software. That opens up the decision five years from now, Does Oracle [Corp.] have a better solution?" said Scott Hicar, CIO of Maxtor Corp., who is currently on R/3 4.6C, which is facing the end of its Mainstream Maintenance support next year. "At end of life, do you pay more and get no enhanced functionality, or do you migrate? Were obviously being nudged by escalating maintenance costs."

The questions Hicar said he and many of his contemporaries are asking is whether to upgrade to 4.7 (which brings little more than a maintenance extension); migrate to the next-generation ECC platforms; or do nothing and wait to see what Oracles Fusion has to offer.

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"I dont see a scenario where we ever move away from SAPs core engine," said Hicar, in Milpitas, Calif. "But five years down the road, assuming Fusion works, and where theyre competing with SAP, say with PeopleSoft, why wouldnt I buy that?"

At the same time, the jump up to 5.0 is a huge investment, and Hicar is questioning the business value. "Integration is easy today, so that isnt such an interesting buying proposition," he said.

The fact is the modernization that is occurring with many ERP systems—such as SAPs NetWeaver, Oracles Fusion and Microsoft Corp.s Dynamics—will make it easier for users to swap out competitors components while still maintaining their core system.

At the same time, those major changes will also cause no small amount of consternation for users.

To modernize their systems, SAP and Oracle are componentizing their applications—breaking down the applications into usable parts that can be integrated with other components. Theyre both also placing their applications on top of their respective integration platforms (NetWeaver and Fusion), which will make it easier to swap out and integrate various application components, making interoperability, in theory, that much easier.

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Oracle, meanwhile, has three separate ERP suites—E-Business, PeopleSoft and JD Edwards (plus Siebel) —and it is taking "the best of" functionality from each and rewriting into a super suite (Project Fusion). While Oracle is still going to offer "lifetime support" for those separate ERP suites, the prevailing notion is that no new upgrades will come once Fusion is in place, forcing users to choose to stay put with their current systems with no more value add or migrate to Fusion.

Next Page: The clock is ticking.