Oracle's Customer Crusade - InformationWeek

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1/21/2005
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Oracle's Customer Crusade

Company outlines ambitious program to develop a suite of merged software.

The struggle for the hearts, minds, and business of PeopleSoft's vast installed base of customers is on.

Oracle, which acquired PeopleSoft earlier this month after a bitter 18-month takeover fight, last week outlined its Project Fusion to develop a suite of merged Oracle, PeopleSoft, and J.D. Edwards software while continuing to develop and support those applications separately.

When Oracle CEO Larry Ellison debuted the blueprint for merging Oracle and PeopleSoft last week, he set as his top priority a target of retaining as much as 95% of PeopleSoft's customer base. That means getting to work right away on the software needed to keep them. "My biggest focus will be on Project Fusion [and] getting the teams together to build the next generation of enterprise apps in a way that's never been done before," Ellison said.

It should be ''business as usual'' for PeopleSoft app users, Charles Phillips says. -- Photo by Eric Millette

It should be "business as usual" for PeopleSoft app users, Charles Phillips says.

Photo by Eric Millette
Oracle president Charles Phillips, in an interview with InformationWeek two days after the event, said Oracle is on a "mission" to address the concerns of PeopleSoft customers, which range from product obsolescence to price increases. It should feel like "business as usual" for users of PeopleSoft applications, Phillips said. Customers "don't have to wonder what's going on," he said. "If they have any doubts as to where things stand or if you have any questions, call us."

It doesn't feel like business as usual for business-technology executives like Rick Davidson, the global CIO for Manpower Inc., which is ready to buy a customer-relationship-management system. With a major investment in PeopleSoft financial, human-resources, and service-procurement applications, PeopleSoft CRM was the clear choice. Today he has a lot more issues to consider. "Now who do I buy it from? It's caused me to pause," Davidson says.

Oracle's rivals are doing everything they can to squeeze into those openings. One day after Oracle revealed its integration strategy, SAP, the market-share leader in the enterprise applications market, unveiled its own plan to convert PeopleSoft owners into SAP customers, including the acquisition of TomorrowNow Inc., a supplier of support services for PeopleSoft apps. Microsoft also is targeting midsize PeopleSoft customers with offers of discounts on its Great Plains and Navision applications.

Oracle has moved quickly to integrate PeopleSoft's operations with its own since completing the acquisition Jan. 7. Oracle is laying off 5,000 workers--most of them from PeopleSoft--bringing its total employee roster to about 50,000.

Of greatest interest to IT managers are Oracle's aggressive product-development road map and the customer-support plans it laid out last week. Short term, people will judge Oracle on its support, which will depend heavily on its ability to keep PeopleSoft technical and support employees, Davidson says.

Manpower is in the midst of implementing PeopleSoft's services-procurement module and extending other PeopleSoft applications worldwide. "We have active projects around the world to convert to PeopleSoft, and we can't afford a hiccup in the services," Davidson says. In an InformationWeek Research survey of Oracle and PeopleSoft customers in December, service and support was cited more than any other factor as the one thing Oracle must get right for the acquisition to succeed.

Oracle has vowed to support PeopleSoft and J.D. Edwards applications (acquired by PeopleSoft in 2003) through 2013. The combined Oracle-PeopleSoft support staff will number 6,000 worldwide, with 1,000 coming from PeopleSoft. Oracle will operate 16 support centers; PeopleSoft had six.

"If they live up to their commitments, we'll be fine," says Carl Greene, executive director of the Philadelphia Housing Authority, which operates on a full complement of PeopleSoft financial, human-resources, and CRM software. Oracle's promises of support through 2013 means the housing agency will be able to recoup its investment in those applications, he says. If Oracle stumbles, the agency can turn to third-party service providers or move support in-house.

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