Oracle remains unruffled

The launch of a new migration program from Microsoft that targets Peoplesoft users in the wake of the Oracle’s acquisition of the firm is failing to ruffle feathers at the merged entity.

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By  Angela Prasad Published  February 28, 2005

|~||~||~|Microsoft has released a migration program for businesses that until now have relied on the Peoplesoft Enterprise, or the Peoplesoft World and Peoplesoft EnterpriseOne packages, both of which were previously offered by JD Edwards. The release has been timed to take advantage of the impending business challenges organisations will face resulting from Oracle’s recent takeover of Peoplesoft.

The package proposes to make it as affordable and efficient as possible for businesses to complete the move to a Microsoft business management application. It provides the necessary migration technology, discounts on Microsoft Business Solutions (MBS) software and services, strategic guidance and support for companies. The migration program is designed especially for those enterprises specialising in Peoplesoft technology.

“We wanted to make people aware that there was a great deal of choice out there when it comes to enterprise resource planning (ERP) solutions,” explains Soha Kamel, regional products group manager at Microsoft South Gulf. “We are advising organisations that currently deploy Peoplesoft World and Peoplesoft EnterpriseOne to consider Microsoft’s Axapta or Great Plains solutions as these will probably be best suited to the specific need of those customers,” Kamel says.

The offer will be valid for customers who license a MBS application until June 2005 and incorporates the financial incentives of a 25% discount on the product licence and on the first year’s participation in the business support and enhancement programs.

The package also provides subscribers with migration planning guides that will assist with the evaluation and assessment of the various application and platform options, along with data migration tools designed to shorten the total implementation time. Finally, there will be guidance in migration and application conversion from systems integrators and technical specialists who will cross-train companies’ sales personnel where necessary.

“Businesses that operate Peoplesoft technology are facing difficult choices today,” says Carl Langhorn, regional manager for Microsoft business solutions in the Middle East and Africa region.

Clearly the Redmond-based giant is placing itself to benefit from the situation by making its solutions as viable an option as possible. Langhorn says Microsoft aims to make an ongoing commitment to Peoplesoft’s customers and partners and ensure that migration can occur in a “smooth, cost-effective manner, and on a schedule that best accommodates their business needs.”

It may seem that the launch occurs at an unfortunate time for Oracle. The takeover deal has already illuminated the lethargic nature of the global software industry and, with other ERP vendors poised to take advantage of the confusion following the court case and subsequent acquisition, it might seem that Oracle now has a challenge on its hands.

However, research firm IDC believes Oracle should not be too concerned. Following the hostile takeover, the analyst house had predicted that continued consolidation in the fragmented ERP and customer relationship management (CRM) markets would further solidify Oracle’s position in the Middle East.

One of the primary concerns for Oracle is to encourage users to stay with its products, but the vice president of the company’s e-business suite, Francis Veldeman, is not unduly concerned. While Microsoft’s action and competition from market leader SAP will keep Oracle on its toes, he does not believe it is a major threat. Indeed, in the past Oracle had great success in retaining RDB’s customers when it acquired the database company from Digital Equipment.

This time around, the company executives are doing their best to reassure customers that the takeover will not result in major upheaval. They stress that the product strategy is not to move Peoplesoft customers to an Oracle solution: “We are reconfirming to customers that the release plan is going to remain the same as that rolled out by Peoplesoft and JD Edwards—everything is going ahead as previously planned,” says Veldeman.

Confidence in Oracle’s ability to support its strong Middle Eastern customer base is strong. Jassar Al-Jassar, general manager of Islamic Financial Service Groups, the Kuwait Finance House (KFH), believes the use of the vendor’s solutions is helping KFH devote more time and resources to its customers and business development opportunities.

“As a major financial institution operating in a very competitive field, we are striving to offer our clients the best services possible, therefore, we have to take advantage of the latest available solutions and technology to achieve our goal.” For this reason, he says, “Oracle is the answer.”

Emaar properties IT arm Sahm Technologies, which is an Oracle customer, says Microsoft’s move is not a real threat to Oracle. Sahm says the software behemoth is trying to enter the ERP space at this stage, whereas Oracle is the second biggest player in that arena. “There is no immediate danger. Oracle is very strong in the enterprise ERP space,” says Arvind Bhatnagar, CEO of Sahm Technologies. “However, one cannot discount Microsoft’s effort. The vendor has taken an aggressive approach and it is working very well. We also have to remember that whatever Microsoft does, it does it well,” he adds.

Oracle is planning to maintain the current four portfolios over the coming thirty-six months and will continue to develop incremental releases for the various product lines. At the same time it will start to develop a fusion project that will bring both the Peoplesoft and Oracle platforms together. Michael Huchler, director of product management for Oracle’s e-business suite in the Middle East, explains that the company’s intention is to keep the transition as smooth and simple as possible for users, allowing a three to five year period before a final migration of all customers from the different platforms to the fusion product.

The convergence will be in stages rather than in one great step, allowing customers to learn the new features and carry on their businesses without interruption. This will make the ultimate upgrade to the fusion application as seamless a process as possible for clients.

The migration pack will be free of charge and, as Huchler explains, the experience should be similar to that of updating from Peoplesoft 9 to Peoplesoft 10: “It is not as though people are going to have to throw something out and re-implement a whole new ERP package. They will keep the infrastructure and just go onto a new release, a process that will require only limited retraining and downtime.”

Veldeman realises that forcing Peoplesoft clients to migrate would have opened the door to criticism. That, he says, “would have been an open invitation to competitors to attack our plans, but there is no migration.” He emphasises that because the Peoplesoft brand is going to continue to run alongside the Oracle product line there is no reason for customers to feel uneasy about the future of the Peoplesoft software. According to Husam Dajani, Oracle’s vice president for Middle East, “from a business and risk point of view, for people who invested in JD Edwards, their investment is protected and they can expect to see better products in the future.”

The most favourable features from each solution will be leveraged and incorporated into the final fusion product. Gradually, the merged organisation will become consistent with Oracle in terms of product release process, development and practices.

However, all successful attributes will be maintained. For example, the user-friendly interface of Peoplesoft, and the manufacturing capability of JD Edwards in single, shop floor instances, will find their place amongst the offerings to be featured in the new releases for the fusion environment.

The company also aims to include a product-flow oriented, industry-centric e-business suite in the project. Veldeman underlines the sentiments expressed by Dajani: “The development and support organisations of Peoplesoft will be maintained, so 90% of the Peoplesoft headcount will be offered opportunities within Oracle,” he promises. “Oracle will not do that if it intends to drop software.”

The company is emphatic that, contrary to speculation, new customers will not experience any real differences following the merger. Peoplesoft and JD Edwards support and pre-sales requests will still go through clients’ preferred partners as opposed to being directed to Oracle. Development and channeling will remain as is, and the portfolio will remain a separate entity for the time being.

According to Dajani, “the partners in the Middle East who are Peoplesoft-qualified will remain so—they will keep their customer base, and the Peoplesoft technology will continue to be sold by its partners’ channels.”

In light of all this, Dajani is confident that the Microsoft migration package launch will not tempt Peoplesoft customers. Feedback he has received indicates that businesses are loyal to the products they already run and are keen to persevere with their investments.

Dajani says this is precisely what Oracle is trying to offer: “At a certain point in time, Oracle will provide a free migration pack, so it is not going to cost a lot of money to move to a integrated product.” He believes that “from a logical point of view, it does not make any sense to change…from a financial point of view it does not make any sense to change, and from an improvement point of view, the fact that Peoplesoft is now part of a larger organisation is a step forwards, not a step backwards.”

Indications at this stage are that Oracle’s optimism is not misplaced. The company’s strategies and road plan appear to have been well received, and customers seem satisfied that the merger will bring stability to the product line. In the Middle East specifically, customer support and account management is set to improve due to Oracle’s dominance in the region. “Customers do not want to be alone,” explains Dajani. “Now they can benefit from being part of a larger organisation—there is safety in numbers.”

However, Microsoft is not convinced. Despite being unable, for reasons of confidentiality, to disclose the names of any customers who were contemplating its migration package, Kamel still predicts that the scheme will be a great success. She explains: “When deciding to switch to JD Edwards, many Peoplesoft customers assessed Oracle and decided to pass them over.”

She believes that potential customers are already aware of Oracle’s capabilities and expects that they may now prefer to go with a different business solutions vendor. “We just want to make sure that people are aware that there are alternatives to Oracle, and that they are knowledgeable about their options,” says Kamel.

While there is clearly a lot at stake as vendors vie to profit from Peoplesoft customers’ post-merger uncertainty, it is user options that are fundamental to the battle. Ultimately, users should seek to take advantage of the situation, selecting the offering that will best meet the needs of their businesses well into the future. ||**||

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