"Henning Kagermann (SAP chief executive) talking
about flexibility and adaptability is like (former French prime minister)
Francois Mitterand talking about having a deep affection for American tourists.
It's not true. Just because they say it's true doesn't make it true."
That's what PeopleSoft chief executive Craig Conway said during his keynote
at his company's annual Executive Leadership Summit earlier this month. Conway
also accused Kagermann of cribbing his speech at the SAP SAPPHIRE conference
from a presentation he gave earlier this year.
The gloves are off as PeopleSoft has concluded its acquisition of J.D.
Edwards, cementing its position as the clear #2 enterprise application provider
behind SAP. Conway feels more confident that it can fend off Oracle's recently
lowered hostile take over bid, and now has his sights set on an "assault on
I asked Linda Lazor, vice president of global product marketing at
PeopleSoft, to provide some specifics regarding Conway's remarks. She described
SAP as lacking in total ownership experience (TOE), which she defined as cost
benefits in terms of fewer IT staff required, speed of implementation, usability
and ongoing operations and maintenance. For example, PeopleSoft claims that it
has seen a 30 percent faster average time to complete over 140 key user tasks.
She also claimed that PeopleSoft has leapfrogged SAP with predictive
analytics in PeopleSoft Enterprise CRM 8.9 and demand driven manufacturing,
which allows companies to more accurately devise supply chain scenarios and to
respond more quickly to changes in demand. She cited some independent studies
and customer comments to support her arguments.
SAP, Oracle, Siebel, Microsoft, IBM and others could come up with
counter-claims, positive comments about themselves and disparaging remarks about
PeopleSoft and each other. It's part of the smackdown American business culture.
However, the bombast tends to make vendors' claims even more suspect than those
made during civil discourse.
PeopleSoft crowed that it has reduced the number of steps to deploy
application updates by 80 percent and disparaged SAP's track record in that
area. SAP did recently introduce a change management toolset to reduce the
complexity and employee hours required for new product installations and
patching. It sounds like good competition yielding better products and services,
as well as some mud-slinging.
The rhetoric and mud-slinging are a side show, however. The issue for
enterprises is which vendors can provide the most reliable, cost-effective
solutions that can scale with organizational growth. The proof is in the
reference accounts and Peer Company reviews.
Post-bubble customers are not willing to spend without a high degree of
certainty that a pre-defined ROI can be achieved in months and not decades. And,
existing customers of PeopleSoft and others are demanding more accountability
from the vendors in order to stay within the fold.
The big three enterprise business applications vendors -- SAP, PeopleSoft and
Oracle -- are all "relatively" safe bets. They have track records, reference
accounts, support infrastructures, billions in revenue and R&D and the
motivation to invest in product development. They have some happy customers and
some who are not pleased with what they bought.
They are account controllers, with the potential to lock-in customers,
buttressed by the high cost of switching and high-touch handling when they are
in a customer acquisition mode. They are consolidators, scooping up smaller
companies to fill out their portfolios or for defensive purposes, and in some
cases swallowing the big fish, as PeopleSoft did with J.D. Edwards and as Oracle
wants to do with PeopleSoft.
They are leaders in their own ways, and come at the varied markets segments
and industries with different strengths and weaknesses. They all are heading in
the same direction, with comprehensive, highly integrated enterprise application
platforms that include a suite of business applications, portals, application
servers, integration middleware and master data management. Open standards,
business process management, on-demand, and Web services and services-oriented
architecture (SOA) are their common buzz words.
With a service-orientation, enterprises can better leverage their IT
investments and reduce the complexities of integrating multi-vendor
applications. SAP's NetWeaver and PeopleSoft's AppConnect, for example, are
service-oriented platforms for integrating applications and building solutions
from discrete components spanning multiple vendors. Oracle's Customer Data Hub
helps companies gather data from multiple sources centrally.
They are also aiming products at the mid-market (moving downmarket),
preaching that less customisation is a good thing, and developing tighter
technology-integration relationships with Microsoft. SAP and Microsoft are
working on to connecting their respective Web services products, and Oracle
recently said that it would make it easier to write Windows-based applications
that access data stored in an Oracle database. Earlier this year, Sun and
Microsoft put aside differences to make their products interoperate better.
While the vendors are preaching more openness and plug and play with Web
services, the reality is that they want to sell end-to-end software stacks. A
recent trend is pre-packaged bundles of industry-specific applications, such as
PeopleSoft's EnterpriseOne product family. SAP introduced "quick fix" packages
of software and services that address integrating tasks such as email
applications or data-archiving tools with the company's ERP and CRM systems. As
Oracle chief executive Larry Ellison testified in the antitrust case involving
his company's hostile bid for PeopleSoft, companies acquire integrated
enterprise software suites from the big three vendors because devising business
systems from multiple vendors is "staggeringly difficult".
Ellison's statement is self-serving, but it also reflects reality, even with
the advent of Web services and SOA. Mixing and matching components, and vendors,
is never going to be as easy and as cost effective as a more monolithic
solution. For SAP's customers, for example, the NetWeaver platform is going to
be more cost effective than deploying components from competing vendors, such as
Yet, customers don't want to be locked into a single vendor. With SOA and
standards switching costs are going down, and it will allow different parts of
an enterprise software infrastructure to be more easily swapped. Going forward,
with just a few vendors dominating the market, customers will have to consider
swapping to gain some leverage in negotiating terms and to ditch vendors that
We are moving from more of a build it yourself model to automated assembly of
components and composite applications. It is a decade long trek that will have
many challenges, just as moving to client/server did in a previous decade. The
key for any enterprise in this evolving IT world is to have people who know the
technology, understand business needs of the organization, can build the IT
requirements documents, vet the vendors and negotiate terms. If you don't have
people who fit that description, your will be seriously handicapped versus those
companies who have invested in hiring and keeping those kinds of rare
Dan Farber is Editor-in-Chief of ZDNet.