A year after winning its vitriolic battle-by-attrition for control of rival Peoplesoft, Oracle is under pressure to clarify its plans for customers running Peoplesoft enterprise resource planning (ERP) systems -- and for those running the World ERP platform of JD Edwards, which was itself acquired by Peoplesoft in 2003. Taken together, Oracle, Peoplesoft and JD Edwards platforms constitute around 25 percent of the overall ERP market.
JD Edwards is particularly strong in smaller, manufacturing and process-oriented businesses, which have typically been loathe to make major modifications or upgrades to business processes that have been successfully automated. That's presented a significant problem for Oracle, which risks alienating the customers it purchased if it pushes them too hard towards its own platform.
Oracle's answer is the Oracle Fusion Architecture, a product roadmap that will combine Fusion Middleware -- a robust integration engine for linking its own systems with others in customer environments -- with the upcoming Fusion Applications Suite (FAS). FAS won't ship until next year, but Fusion Middleware is already shipping and has more than 28,500 users around the world, Quest '06 attendees were told by Adrian Johnston, Oracle's Asia-Pacific vice president of application development solutions.
"It has become clear that there will not be one single supplier of business systems," Johnston said of the importance of smooth integration to Oracle's migration plans, "but those systems must operate as though they are. Many companies may have a mass of infrastructure, but that doesn't mean they actually get better information. The aim of Fusion is really to provide applications that will run your business better, giving you a platform for innovation as well as a continual source of competitive advantage."
Oracle has worked to assuage critics of its protracted $US10 billion Peoplesoft takeover by reaching out an olive branch to developers and customers, but Quest '06 was the first time that many JD Edwards customers were hearing detailed plans about Oracle's Fusion roadmap.
That roadmap ends with the eventual delivery of FAS and the cessation of JD Edwards and Peoplesoft development, Oracle has made clear that it will continue developing both JD Edwards World (a new version 9.1 is due next year) and Peoplesoft's ERP platform for the time being. Oracle's own applications suite will evolve into FAS within the next few years, but JD Edwards or Peoplesoft users -- or those joining the Oracle family through other acquisitions -- will be allowed to stay with their existing platforms as long as they like.
"Oracle understands that winning your business over time is absolutely predicated on giving you more choice," Roland Slee, the company's vice president for Oracle Fusion middleware sales, told the audience.
By using a carrot approach rather than the stick used by most vendors -- who regularly stop supporting old products in an effort to push customers into upgrades -- Oracle is hoping to keep customer sentiment and buy-in strong long enough for it to shift to the new Fusion platform, which Slee characterised as "an upgrade, not a reimplementation. You can do fairly dramatic things with this technology if you choose to lead," he continued. 'The good news is that you don't have to be brave."
Oracle has backed its rhetoric with concrete support initiatives that it hopes will convince customers to stick with it for the long term. The company also recently launched One Stop Support, a program for providing integrated, multi-vendor support for independent software vendors. And, in a significant gesture, Oracle now offers lifetime support to JD Edwards and Peoplesoft customers on their existing platforms.
"The message we've gotten from customers was that they're not getting the ROI they want" by being forced to upgrade applications too often, Tom Shields, Asia-Pacific vice president of Oracle Support Services told the Quest '06 audience. "Our lifetime support policy was designed to provide customers with a wider ROI that is not dependent on development cycles, but rather is dependent on when they've released a change in [business] policy."
The focus on support may marginally increase the burden on the more than 6000 Oracle support staff handling over 1.6 million service requests annually, but Oracle hopes its strong support record will tighten its bonds with customers and convince them FAS is more than just another marketecture. Peoplesoft customers are reportedly happier with support since Oracle bought the company, with a recent survey finding that customer satisfaction had increased from the mid-70 percentile to between 85 and 93 percent.