Time for PeopleSoft Customers, Workers to Cut Best Deal

Its time for PeopleSoft customers and employees to start thinking about the future and about protecting their own interests, because nobody else is going to be watching out for them.

Benevolent or paternalistic arent words that have ever been seriously associated with Oracle or with its founder and CEO, Larry Ellison. Business is business, and now that PeopleSoft is about to disappear into Oracles labyrinthine halls, everybody is going to have to cut the best deal that they can.

So, to all PeopleSoft employees, that means taking a close look at your role at PeopleSoft and soberly considering whether there will be a place for you in the new organization.

Customers are in a far stronger position. There are still plenty of ERP (enterprise resource planning) software companies in business, allowing them to play Oracle off against the competition. But its still time to consider the current status of existing PeopleSoft installations and what their useful life is likely to be.

/zimages/1/28571.gifClick hereto read about Oracles short-term transition plans after it closes the PeopleSoft buyout.

Customers whose installations are up-to-date and running smoothly have the luxury of doing nothing at all and waiting for Oracle to make the first move. Once Oracle gets its product strategy in place early in 2005, the challenge for customers will be to ensure that they are able to control their own destiny in terms of product support and an upgrade path.

Dont hesitate to hold Oracle to all of the promises it made during the interminable legal maneuvers leading up to buyout. Make Oracle fulfill its pledge to provide a full 10 years of support for PeopleSoft applications.

Watch out for any backsliding from Ellison statements that Oracle will release a PeopleSoft 9 and a J.D. Edwards 6. If Oracle appears to be waffling on that pledge, it may be time to consider a shift to other ERP applications.

Even customers who are confident that Oracle will fulfill all of its promises should consider whether the time will come in the next five or 10 years to review their companys entire ERP installation to see if alternative products might deliver greater business benefits.

Next Page: Customers in the drivers seat.

Keeping Customers Happy

PeopleSoft customers have a right to expect that Oracle will bend over backwards to keep them happy because Oracle knows that their loyalty is not guaranteed. Thats because looming in the background is the 800-pound gorilla that made the buyout such an imperative for Oracle: SAP.

Oracle wants to make sure that it can remain competitive with SAP globally and that SAP does not make deep inroads in the ERP market in the Americas.

There are other competitive threats as well, not the least of which are Microsoft, Lawson Software and all of the others that Oracle mentioned in its lawsuit last summer, which overturned the U.S. Department of Justices ruling that the PeopleSoft buyout would violate antitrust law.

Testimony in that trial showed that customers were adept at wringing price cuts and service upgrades from the competing ERP software producers. Customers buying power has been in no way diminished by the buyout.

PeopleSoft employees are in a much weaker position. The only truly safe positions are among PeopleSofts corps of developers, application designers or quality-assurance specialists. There are never enough really good software engineers, and Oracle officials have made it clear that they will be the first to be welcomed in the new organization.

For several years at least, experienced PeopleSoft developers are going to continue to work on the next versions of the PeopleSoft and J.D. Edwards products that Oracle officials have promised to deliver.

/zimages/1/28571.gifClick hereto read about Oracles efforts to win the confidence of J.D. Edwards ERP software users.

Even after these products ship, PeopleSoft developers will be needed to develop the converged Oracle-PeopleSoft product that Ellison promised. Others will be needed to continue working with current PeopleSoft and J.D. Edwards customers fixing and upgrading existing installations—work that could actually keep them busy for the next 10 years if thats what they want to do.

Oracle co-president Charles Phillips acknowledged that many of the programmers and managers at PeopleSoft had formerly worked at Oracle. Thus, his company had a good idea of the skills and experience of many current PeopleSoft staffers. For those PeopleSoft workers who left Oracle because they were unable or who departed on less than amicable terms, the prospect of a return will be less than appealing.

As usual, the people who lose out in any merger are those in administrative positions that are typically duplicated at the parent company. This includes people working in human resources, public relations, marketing communications—anything that isnt directly involved with the production and maintenance of products is vulnerable.

All of these people, however, have had plenty of time to strap on a parachute and look for a soft place to land.

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