SAP takes aim by planning for tomorrow now

SAP has begun trawling Oracle's customer base reaching out to more than 100 local JD Edwards and PeopleSoft users as part of a telephone market research survey.

In its first round of calls, 30 percent of recipients agreed to hold talks with the German software company, SAP Australia managing director Geraldine McBride said, adding plans are underway to begin a second round of calls until the entire base is covered.

"Two years ago these customers wouldn't talk to SAP, but now they are interested; they want to get off the frogmarch of upgrades they are on and take control of their maintenance spend," McBride said.

"They realize they have to make a choice; it is just a matter of when. Oracle is using maintenance revenue paid by these customers to fund Fusion, and they aren't likely to see any real results before 2008."

McBride said SAP doesn't expect JD Edwards and PeopleSoft customers to immediately migrate to SAP, but to make incremental moves.

"For examples, they can keep their AS/400 on the backend and just add SAP analytics, CRM or portal technology," she said.

An example of SAP's commitment to win over Oracle's customers is its January 2005 acquisition of TomorrowNow, a company that provides critical support to JD Edwards and PeopleSoft systems.

The company, which has 120 customers globally, is now a fully-owned subsidiary of SAP and was launched in Australia this week.

And the company is making big promises guaranteeing a 50 percent reduction on annual maintenance fees to customers who use the third-party support organization.

TomorrowNow CEO and president Andrew Nelson admits third-party support is a new concept in the region.

"But we keep it simple; give us your maintenance figure and we divide it by two," he said.

"Customers with a stable system don't want constant fixes. We are supporting mature software so clients don't want to be force-fed updates or deal with fixes full-time.

"We react when there is an emergency and only when something is broken."

Nelson says Oracle won't be releasing new product for years which means customers are funding the development of Fusion with little return. "Fusion is a complete re-implementation so users do have to decide," he added.

Since the company was launched in 1998, Nelson said it has grown 100 percent every year and in the next 18 months will recruit between 15 and 45 staff.

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