The transcript of Oracle CEO Larry Ellison's analyst call is now available, and there's more definition around the direction that Ellison intends for the PeopleSoft (Enterprise) and JDE (Enterprise One and World) product lines. Because this is a major source of concern for customers and prospects of PeopleSoft/JDE, so I'm going to quote extensively from the transcript.
First, Ellison indicated that Oracle will develop a "new" version of PeopleSoft and a "new" version of JDE. It appears that these new versions will be an intermediate step toward creation of a future product that merges the three product lines into one. Here's what he said,
We intend to enhance PeopleSoft 8 and development [sic] a all new version of the PeopleSoft product, PeopleSoft 9. We intend to enhance J. D. Edwards five and develop an all new version of the J. D. Edwards product line, J. D. Edwards 6. We also intend to design and merge PeopleSoft/J. D. Edwards/Oracle application suite with the features necessary to enable easy migration from whatever product you are currently running.
In his opening comments, Oracle President Charles Phillips indicated that Oracle will continue to support PeopleSoft and JDE customers, whatever technologies they are using. "We will continue to develop the PeopleSoft products," said Phillips. "We will support their existing environments including other database products."
During the Q&A period, Ellison went into more detail about where expense and headcount cuts would occur and directions for the PeopleSoft and JDE product lines.
Harry mentioned...approximately $150 million reduction in R&D. Keep in mind that will be split between Oracle and PeopleSoft. So that's not coming out of the PeopleSoft exclusively by any means. That's split, not quite equally but close enough to equally between Oracle and PeopleSoft. On the sales and marketing side, our marketing budgets won't go up very much but however our applications sales force will increase the capacity of our dedicated applications sales force worldwide by approximately 50% and you can conclude what you will about our expectations in our models in terms of how much additional applications we expect to sell. But those things -- those two numbers are rather important. Again, marketing flattish, G&A flattish, sales -- sales force increasing capacity by 50%. And in terms of development we are going to keep the PeopleSoft and J.D. Edwards development teams separate from the Oracle development team for some time to come. They will be working on enhancements, product enhancements to PeopleSoft eight and J.D. Edwards five and they will be developing an all new version of the PeopleSoft product, PeopleSoft nine, and an all new version of the J.D. Edwards products, J.D. Edwards 6. Simultaneously with that we will take some of the very senior designers from J.D. Edwards, PeopleSoft and Oracle and we will be designing a moderate -- a next generation version that merges the features of all three of those suites of products, J.D. Edwards, PeopleSoft and Oracle. But again that product is some ways away and PeopleSoft customers should expect an upgrade from eight to nine before they entertain the idea of moving to the merged products.
Ellison also gave more details on the timeframe for the new PeopleSoft and JDE versions:
I think PeopleSoft nine will be coming out -- again, keep in mind we are still at the guessing stages here but it would come out approximately the same time PeopleSoft was going to release PeopleSoft nine. There should be no impact on schedules as to the availability to PeopleSoft nine to PeopleSoft customers or J.D. Edwards six. I'm not even sure there was going [to be] a J.D. Edwards 6 planned by PeopleSoft. So those products will come out, let's say, 18 months from now, approximately -- you know, 12 to 24 months is a safer range. I don't know exactly. And then the subsequent release, if you will, PeopleSoft ten, will likely be the merged product. But we will evaluate if we do -- you know, we are going to be talking to customers, we are going to evaluate doing a PeopleSoft 10 as well. But we are committing to improving PeopleSoft eight, delivering a PeopleSoft nine, and then going through the design process of that merged product. As of right now we would think if the PeopleSoft nine product is in the 12-24 month time frame, the merged product would be, let's say, no earlier than, let's say, 30-36 months out.
After reading the entire transcript, one point is clear: Oracle is giving no indication at all that it wants to shed the JDE product line, as I speculated earlier
. This does remove some uncertainty for the JDE installed base and is enough reason to keep JDE on the short list for companies that are currently shopping for software.
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