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The Enterprise System Spectator

Monday, January 17, 2005

Competitors swarm around PeopleSoft customers

Like ticket scalpers outside a football stadium, Oracle competitors are jockeying for position in front of PeopleSoft customers. A few are already making offers:

Lawson is offering a migration program targeting PeopleSoft customers running on IBM's iSeries (formerly AS/400) hardware, mostly those running software from the former J.D. Edwards.

Microsoft is offering a 25% discount on its business applications, such as Great Plains and Axapta. I voiced my opinion on Microsoft's offer last week.

SAP apparently doesn't have a formal switch program, yet. But that hasn't stopped SAP from approaching PeopleSoft customers aggressively on a case-by-case basis. According to Computerworld, "...an SAP AG spokesman said that his company has reached out to PeopleSoft users ever since Oracle announced its intention to buy the firm in June 2003."

OpenMFG, a semi-open-source ERP vendor, has a different approach. Ned Lilly, CEO, wrote me last week pointing to his offer to PeopleSoft employees that are laid off by Oracle. He wants these "PeopleSoft refugees," as he calls them, will form consulting firms to rep OpenMFG.

Generally, I don't think any of these offers are going to get much traction, at least immediately, and I don't think Oracle is worried about them. Installed base customers are generally a conservative group, and I suspect most will take a wait-and-see approach with Oracle. Furthermore, if software professionals laid off by PeopleSoft want to form their own firms, they're more likely to do it in some way to support PeopleSoft's installed base.

Which brings me to my last point. One area that may get Oracle's attention is competitors that offer alternatives to Oracle's annual maintenance and support contracts. Several third party support firms, staffed with former PeopleSoft and JDE employees, are lining up to take annual maintenance fees away from Oracle. Firms such as Klee Associates and TomorrowNow offer annual maintenance and support at a price that is significantly less than what PeopleSoft used to offer. Inasmuch as PeopleSoft's maintenance revenue stream was one of the things that justified Oracle's sweetened offer, Oracle is probably not going to stand by and watch these customers depart. I'm no lawyer, but it wouldn't surprise me if Oracle launches some sort of legal attack against these firms, on whatever basis Oracle can come up with.

Update, Jan. 20. SAP has now formalized its switch program. SAP is offering 75% discounts to PeopleSoft customers who switch to SAP. See the Mercury News article for details. It is also offering reduced annual maintenance fees through its acquisition of PeopleSoft third-party support provider TomorrowNow. See my Jan. 20 post for details on SAP's TomorrowNow acquisition.

Related posts
Microsoft wants PeopleSoft customers but doesn't have much to offer
Oracle, IBM, Microsoft battle for technology infrastructure of PeopleSoft customers
IBM is a loser in Oracle/PeopleSoft deal
SAP to provide maintenance for PeopleSoft products

by Frank Scavo, 1/17/2005 10:26:00 AM | permalink | e-mail this!

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