The Man On The Hot Seat For Oracle-PeopleSoft

CEO Larry Ellison and co-presidents Safra Katz and Charles Phillips held forth on stage. But it was clear at Tuesday's event at the Oracle campus that the stationmaster who will run the merger of Oracle-PeopleSoft applications is John Wookey, Oracle senior VP for applications.

Wookey outlined the formation of an Application Strategy Team that "will not be four to five people sitting in a room thinking high-level strategy. It will be hundreds of PeopleSoft and Oracle employees." Their goal will be to build a future version of J.D. Edwards, PeopleSoft, and Oracle applications so that existing businesses customers "may easily migrate to those products."

The merged product line has been dubbed the Fusion application set and mapping a smooth migration path to it is a top priority, Wookey said during a three-hour Webcast Jan. 18 yesterday on how the merger would proceed.

Ellison and other Oracle officials said the migration path be as "automated" as possible, striving to avoid the usual generation gap and painful upgrade that application users encounter.

In completing its $10.3 billion acquisition of PeopleSoft, Oracle acquired PeopleSoft's Enterprise application suite plus those from an earlier PeopleSoft acquisition, J. D. Edwards EnterpriseOne and J.D. Edwards World applications. For Oracle's merger strategy to work, it must keep existing users of those applications happy with good technical support and continued application development. Then it must wean them from older product lines to its new Fusion set, scheduled to appear in 2008, with some individual apps appearing in 2007.

Wookey may be just the man to pull off such a product merger. After stints with Andersen Consulting and eight years at manufacturing application vendor Ross Systems Inc., Wookey was once offered the job of heading application development for PeopleSoft, which he turned down to become head of Oracle applications. Noting that Wookey once again has the chance to lead PeopleSoft application development, Ellison joked, "I don't think he's going to turn it down this time."

"Market leadership in applications is my dream," Wookey said. He then urged PeopleSoft developers, 90% of whom were notified they were being offered a job at Oracle Jan. 15, "to sign and send in your acceptance of the offers. I'm really anxious to get to work with all of you."

Oracle is basing a future merged product line on modular, services-oriented, Java-based applications. Both Oracle and PeopleSoft were moving in that direction, with Oracle having more experience and a greater lead in adopting Java technologies, Wookey said. Other standards mentioned by Ellison as part of the Fusion approach included HTML commonly used to build Web pages and Dynamic HTLM, a variation that allows active elements to be embedded in the otherwise static HTML page.

Hundreds of employees will be involved in the effort because the Fusion set will need to pay attention to the business strategy and life-cycle management of each product line until they can be merged, Wookey said. Future applications must be designed to be flexible, easy to customize, and easy to maintain, he added. Each of the applications is likely to incorporate the Oracle concept of data hubs and transaction bases, or portable data and transaction services that can be used by many applications. A data hub or transaction base can act as a point of integration among otherwise separate applications, he said. In 2006, Oracle, for example, will implement a clinical transaction base for the pharmaceutical industry for use with its applications, Wookey said.

The head of the Application Strategy Team is PeopleSoft veteran Jesper Andersen, former VP and general manager of PeopleSoft's tools and technology division.

In addition, the Oracle and PeopleSoft development organizations will form a technology group that will seek to ensure consistency of development environment and tools across the three development groups. Cliff Godwin, senior VP of Oracle's application technology group, will lead the effort. Joel Summers, an 11-year Oracle veteran and senior VP of human-resources management systems, will relocate from Oracle headquarters at Redwood Shores to Pleasanton to lead the combined technology support groups. Ellison said Oracle intends to keep PeopleSoft's Pleasanton campus open, and that the layoffs there would be "in the hundreds, not in the thousands. In fact, we're moving some Oracle people who live in the East Bay over to the Pleasonton facility."

Ellison and Wookey both spoke the notion of culture that many have flagged as the most-difficult aspect to combining the two companies. "Some traits of the PeopleSoft culture we actually want to inherit--things that make them unique and successful as an application company," said Wookey. Summers understands that culture because he has competed against PeopleSoft's strength in human resources applications, he added.

Ellison, however, dismissed the notion that PeopleSoft "is warm and fuzzy, and we're hard-edged and ruthless," noting that Craig Conway--former PeopleSoft CEO and top sales executive at Oracle--managed to thrive at both places. Yet he acknowledged the rivalry was intense. "Competition breeds emotion, and that's a good thing," Ellison said. "And over time, those emotions run pretty deep, and I'm sure PeopleSoft wanted to beat us just like we wanted to beat them, and they competed with us from the time they were founded."

Wookey also outlined the following schedule for application upgrades:

In 2005, PeopleSoft Enterprise Version 8.9 will continue to be rounded out with additions and enhancements. J.D. Edwards EnterpriseOne and World applications will receive regular enhancements.

In 2006, Oracle will release Version 9.0 of PeopleSoft Enterprise and Version 8.12 of J. D. Edwards EnterpriseOne. In addition, Oracle will launch Version 12 of its own E-Business Suite.

In 2007, the first applications showing the Fusion platform will be released.

In 2008, a merged Fusion application suite will be made available that gives all three product line users a migration path to Java-based applications organized around the modular principles of services-oriented architecture.

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