Will Oracle and PeopleSoft impact the supply chain software market?

By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 1/21/2005

Oracle’s fight for PeopleSoft is over (800-833-3536). The challenge now is for Larry Ellison’s team to find a way to merge the two companies and product lines from PeopleSoft, J.D. Edwards (an earlier acquisition by PeopleSoft) and Oracle into one business that makes sense to users of their products.

And, in keeping with one of the latest supply chain management trends, Oracle is dubbing this new approach “fusion.”

What will this mean to the supply chain software market? Oracle attempted to answer that question last week. For some analysts, the presentation raised more questions than answers.

“Since the acquisition announcement was only four weeks old, the presentation was at a pretty high level, without a lot of details,” says Judy Sweeney, research director, AMR Research (617-542-6600).

Here’s what we know, so far. Oracle has promised to support product from all three companies until 2013. They will maintain three separate development teams to create enhancements to the J.D. Edwards suite of applications, and continue to come out with new releases of PeopleSoft’s applications. However, they do not intend to sell J.D. Edwards into new accounts.

Will users put-off by two major mergers in two years jump ship? Sweeney doubts it. “The devil is in the details,” she says, “but since Oracle is going to support all three lines until 2013, there’s no reason to make a hurried decision about your ERP vendor.”

Oracle’s competitors do see the merger as an opportunity to take market share as Oracle devotes it’s energies to making the merger work. For instance, Sweeney points out that within hours of the Oracle presentation, SAP announced that it had acquired TomorrowNow, a consulting company that gives it the ability to provide support and maintenance to PeopleSoft and J.D. Edwards applications. “I think SAP, Microsoft, Lawson and SSA Global will try to swoop in and show Oracle/PeopleSoft customers how they can move to a new application,” Sweeney says.

Still Sweeney thinks that in the short-term, the impact will be negligible. “No one implements an ERP system for the short haul,” Sweeney says. “I don’t see a lot of people ripping out their existing systems just because of the merger, even if they’re unhappy about it.”

Users of supply chain execution systems, like warehouse and transportation management may benefit from the merger, according to Greg Aimi, another AMR analyst.

“Oracle’s latest release had new-found strength in warehouse and transportation management,” Aimi says. “PeopleSoft and J.D. Edwards both had very light functionality. Oracle could be used to fill that gaping hole in the PeopleSoft application set.”