Two top Oracle executives met with analysts and customers in New York on Monday as part of an Oracle road show aimed at reassuring those nervous about Oracle's recent buying spree and its plans for a merged applications set, dubbed Fusion, incorporating its purchases.
"I know you're all wondering: is there some strategy behind all this bizarre behavior over the last six months, us buying all these companies, or is it just Oracle being Oracle?" company President Charles Phillips said at the event's start.
Phillips and John Wookey, Oracle's applications development head, reiterated the points Oracle first laid out in January, when it introduced its Fusion road map. Oracle will deliver one more major update, due in 2006, in each of its three applications lines -- its own E-Business Suite, PeopleSoft Enterprise, and EnterpriseOne (formerly J.D. Edwards) -- and release an applications set built on a new, Java-based architecture, Fusion, in 2008. Customers on all of the product lines will be able to smoothly upgrade to Fusion without any greater pain than they encounter in a standard applications upgrade, executives said.
Since unveiling their Fusion plans, Oracle executives have taken great care to deliver a consistent message about their PeopleSoft support plans -- mindful that before the contentious merger went through, PeopleSoft's customers were confused and upset about the uncertain future of their ERP (enterprise resource planning) technology. Still, when it comes to specifics of how Oracle will blend its heterogeneous applications architectures, the answer is often "still to be determined."
One customer at Monday's event asked how Oracle would reconcile a difference in database support. Because PeopleSoft supports a number of different databases, it stores much of its business logic elsewhere, while Oracle builds most of its business logic into the database layer. Phillips said Oracle is in the process of talking with customers about its options, and will make a decision later.
"We decided to see how important that is to customers," Phillips said. "We can do a lot more for you if we can optimize and take advantage [of the database]. We can't do that for an unlimited number of [database] configurations." Wookey said Oracle is looking to push more business logic into the middleware layer, potentially ameliorating the problem.
Oracle will also limit its bundled database with Fusion to its own software -- it won't offer IBM's DB2, as it has in the past. It will instead work with IBM and other database vendors to certify their products for use with Fusion applications.
Oracle is still selling all of its acquired software, and is working on bringing PeopleSoft's pricing model in line with Oracle's, Phillips said. While Oracle maintains standard licensing prices on its software and publishes a price list on its Web site, PeopleSoft used a more complex pricing method for its products, which varied the software's licensing cost based on such factors as a customer's size, industry and annual revenue. Customers purchasing PeopleSoft licenses today still do so under PeopleSoft's licensing structure, but within the next few months Oracle will add PeopleSoft's products to its price list, Phillips said.
Oracle also plans to soon add PeopleSoft's applications to its Oracle On Demand hosted software service, which Phillips said now has 400 customers and around 100,000 subscribers. PeopleSoft had its own hosted applications business, but, according to Phillips, it never drew a large customer base.
Oracle's newest applications purchase, Retek, will also be put on track to blend into the Fusion architecture. Meanwhile, Oracle will integrate Retek's applications with its E-Business Suite within the next six months, and with PeopleSoft's applications within the next nine months.
Phillips carefully avoided discussion of the current quarter and IT spending environment, which has spooked Wall Street after a run of earnings warnings and misses, including one from usually-steady IBM. He also deflected a barrage of questions about whether Oracle would be interested in buying CRM (customer relationship management) maker Siebel Systems, which changed chief executives last week after a disastrous quarter.
Oracle once had Siebel on its shopping list, a fact which came out in court last year during the long legal battle that preceded Oracle's PeopleSoft acquisition, but since then Oracle has spent US$10.3 billion buying PeopleSoft. Analysts say Oracle is unlikely to take on another multibillion dollar acquisition so soon, especially of a company like Siebel that makes products significantly overlapping those already represented in Oracle's product portfolio.
Still, Phillips said Oracle's appetite for acquisitions isn't sated. Oracle plans to build a "retail global business" unit around Retek, a model it hopes to emulate in other industry areas once it has a critical mass of content and technology in a given area, Phillips said. He cited banking, health care and the public sector as industries Oracle sees as particularly strong.