News

SAP reaches out to PeopleSoft and JDE customers

• By John K. Waters
• January 21, 2005

Just hours after Oracle Corp. outlined its plans last week for integrating its newly acquired PeopleSoft assets, chief rival SAP snatched a bit of the spotlight by offering to take over the maintenance and service of PeopleSoft and J.D. Edwards (JDE) applications, and even migrate their users to the SAP platform.

The Germany-based enterprise application company’s Safe Passage program is designed to help PeopleSoft and JDE customers with “the uncertainties arising out of the acquisition of those software brands by Oracle Corporation, and a clear road map to assist these companies in evolving to the next generation of business software,” SAP said in a statement.

Under this program, organizations running PeopleSoft and JDE applications will be able to migrate those apps to SAP software, including the NetWeaver platform, which includes connectors for JDE and PeopleSoft products, the company says.

SAP claims there are approximately 2,000 companies running SAP systems along with either PeopleSoft or JDE applications. SAP says the Safe Passage program would be “particularly attractive” to companies with these kinds of mixed environments.

"I think this was a brilliant move by SAP," META Group analyst David Yockelson tells eADT. In another move that appears aimed at Oracle, SAP announced it had acquired TomorrowNow, of Bryan, Texas, which provides third-party support services for PeopleSoft and JDE apps. No details of that deal were available.

"Though TomorrowNow still has some questions to answer (such as breadth of support), SAP is clearly taking it to Oracle immediately and trying to capitalize on any fear exhibited by the set of customers in perhaps the most precarious position—the JDE users and few-module PeopleSoft users."

META had predicted a growing third-party maintenance market for PeopleSoft, Yockelson says, and TomorrowNow was considered the best early example. The SAP acquisition will give the company a better backbone of support, and puts SAP squarely in customers’ faces. "Oracle had mostly been dismissing TomorrowNow," Yockelson adds, "and (generally) the effectiveness of a third-party maintenance market. Now, Oracle will have to step up to the plate and deliver on competitive maintenance pricing, product enhancements, etc.—not that it wouldn’t have otherwise, but this forces the issue more quickly."

Oracle said this past week that it had completed the organizational integration of its $10 billion acquisition of PeopleSoft (which bought JDE in 2003). Oracle CEO Larry Ellison told reporters that his Redwood Shores, Calif.-based company would now focus on retaining PeopleSoft customers and developing a standards-based application suite, dubbed Project Fusion, which will combine the Oracle and PeopleSoft product lines. Oracle says it will continue to develop and support the PeopleSoft products until 2013.

But a day later, SAP officials countered that rather than reassure PeopleSoft users, Oracle’s announcements had exacerbated a sense of uncertainty left over from the takeover drama. "Customers have expressed significant concerns about the acquisition," Bill McDermott, president and CEO of SAP America, told journalists and analysts during a conference call. "Now, there’s even more concern about future plans."

Shai Agassi, a member of SAP’s executive board, argued that Oracle’s promise to support PeopleSoft products until 2013 was "highly optimistic," and he scoffed at Ellison’s assertion that Project Fusion will be standards-based. "SAP has had a standards-based, integrated platform since 2003," he said. "And SAP is delivering a platform that truly supports Java, ABAP [SAP’s programming language], and .NET."

"Software companies don’t own their customers," Agassi added. "We serve them. You don’t buy or sell customers."

Oracle had no response to SAP’s announcement. Another Oracle competitor has offered to soothe the frayed nerves of beleaguered PeopleSoft users with support and migration options. Microsoft announced a similar initiative recently, offering PeopleSoft customers who migrate to one of its application suites a 25 percent discount on license fees, and a one-year, 25 percent reduction in annual support costs.