"They don't have to do anything different," Phillips said in an interview Thursday, two days after CEO Larry Ellison, Phillips, and other Oracle managers presented plans to continue developing PeopleSoft, J.D. Edwards, and Oracle products for the next few years while beginning work on a fourth applications suite called Fusion that combines the best functionality of all three product sets.
"There's no urgency [for customers] to do anything," Phillips says. "The products will be enhanced and evolve." Oracle is on a "mission" to address the concerns of PeopleSoft customers, which range from product obsolescence to price increases. "We can only be successful if those customers are entirely satisfied," he says.
Oracle's Fusion project will involve more than repackaging existing technology. "We're trying to combine the functionality and the ideas, [but] we're not meshing actual code together," Phillips says. "We're looking at all the assets we have across all the products and saying, 'These are good ideas. Let's make sure these ideas show up in the Fusion products.'"
Oracle will make its own infrastructure software, including its application server and Oracle database, the default underlying technologies for all of its applications. "We think we can engineer in extra value," he says. Yet, the company plans to continue certifying compatibility with other leading platforms, such as IBM's WebSphere, to ensure customers have alternatives.
SAP and Microsoft are offering software and services discounts in an effort to snare disgruntled PeopleSoft customers, but Phillips downplays the effectiveness of those programs. "This happens all the time, trying to get customers to switch," he says. "If the product is working and you're getting good support, it just doesn't make a lot of sense."
The former Wall Street analyst, who joined Oracle from Morgan Stanley in 2003, doesn't anticipate a new round of price cutting as the remaining ERP vendors fight over the PeopleSoft and J.D. Edwards installed base. "Customers are professional buyers, and they negotiate with us hard," Phillips says, adding price pressure has "always been intense and I expect it to remain intense." On Tuesday, CEO Ellison said it's "very" possible Oracle will lower prices on PeopleSoft applications.