PeopleSoft users still wary of Oracle's Fusion

Thirteen months after taking over rival PeopleSoft, Oracle's product road map appears to be its major Achilles' heel with the customers it inherited.

Oracle clinched its US$10.3 billion buyout of PeopleSoft in January 2005, much to the trepidation of the latter company's installed base. Asked how they feel now, a majority of 12 former PeopleSoft customers interviewed -- seven -- said they are upbeat or neutral about the merger. Five of them praised Oracle's willingness to communicate with them, both directly and through the user organizations such as the Quest International Users Group. (Quest had been on the outs with PeopleSoft before the merger.)

Nevertheless, five users said they remain uncertain or wary about Oracle's efforts to implement Fusion, its next-generation best-of-breed applications suite.

Since the buyout, Oracle executives have been public about not forcing customers to move to Fusion, saying that the applications would be crafted with user input through established groups such as Quest and the Oracle Applications User Group (OAUG).

Rival SAP has been exploiting user uncertainty over the merger in general and Fusion in particular. SAP claimed that customer doubt had been a contributing factor in allowing it to pick off 200 Oracle customers with its so-called Safe Passage ERP replacement program over the past year. Most of the defectors were former PeopleSoft accounts, said an SAP spokeswoman.

Of all the issues customers raised during recent interviews, questions about Fusion were at the top of the list.

"I think the jury is still out," said Mark Scherer, IT manager at Flatiron Construction in Colorado. The firm runs the World green-screen applications that became part of PeopleSoft when it bought out J.D. Edwards & Co. "Is the Fusion architecture a fit for us, or do we need to start looking at tier-two ERP vendors in the not-to-distant future?" he asked. Nevertheless, Scherer said Oracle has been taking good care of his company, leaving him upbeat about the future.

Although Oracle has reached out to user groups, giving customers a clear product road map has happened at a "glacial rate," said Robert Robinson, a business systems supervisor at Durr Systems. The Michigan based automotive supplier uses J.D. Edwards ERP applications. With Fusion, he said, there is still nothing substantial for a J.D. Edwards user to latch on to. Robinson said he's also watching to see which companies are early adopters of the technology.

In general, customers wonder about the size and complexity of Fusion, noted Dave Richards, CIO at Pacific Steel & Recycling. The Montana based company runs J.D. Edwards' OneWorld XE.

"There are still many questions about costs, support, technology and migration paths that are yet to be answered," Richards said.

It will probably take another 12 months, after an upcoming upgrade, to decide on the merger's merits, said John Schindler, CIO at PeopleSoft Enterprise shop Kichler Lighting, a lighting fixtures maker in Cleveland. In the meantime, as Oracle moves forward, Schindler said he's getting "nervous" about what Fusion is going to be. "Again, it is too early, so for now I'll take a wait-and-see approach," he said.

Five customers were unequivocally upbeat about the deal, even with the questions surrounding Fusion. For instance, Oracle established a lifetime basic support policy for its applications and continued to actively develop the J.D. Edwards and PeopleSoft lines. It has also offered high-level access to executives, said John Matelski, president of Quest and deputy CIO for the city of Orlando, a PeopleSoft shop.

"There is no question that PeopleSoft and J.D. Edwards customers are better off than they were one year ago," he said. And because of Oracle's work on the PeopleSoft product lines, Matelski added, "it's not like everyone is just sitting around stagnant for the next two years waiting to see what Fusion has in store."

The Fusion road map is still a major problem for the PeopleSoft installed base, said one analyst. "Oracle doesn't seem to be seriously addressing the natural concerns of people that have to make a decision about Fusion," said David Dobrin, an analyst at consultancy B2B Analysts Inc. in Cambridge, Mass.

Jeb Dasteel, Oracle vice president of global customer programs, downplayed any defections to SAP as statistically negligible. Moreover, he said, the company has actively worked to collaborate with the user groups, as well as a CIO advisory board, and regularly reached out to inform customers of Oracle's plans.

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