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Users benefit from SAP, Oracle battle

As SAP and Oracle duke it out, most analysts agree that PeopleSoft and J.D. Edwards & Co. customers are in a position to craft some good deals.

Just a day after Oracle Corp. launched an ambitious project to combine PeopleSoft and J.D. Edwards technologies with its application suite, SAP executives went on the offensive with a plan of their own to lure those customers away from Oracle and onto a complete SAP technology stack.

Maintenance costs will be ratcheted down and I think Oracle will match SAP in anything they do and even try to beat them.
Michael Dominy,
senior analystYankee Group

As Oracle keeps nipping at SAP's heels, and SAP tries to bite back, analysts and users agree that the dogfight between the two companies is placing PeopleSoft and JDE users in a perfect bargaining position.

"Maintenance costs will be ratcheted down and I think Oracle will match SAP in anything they do and even try to beat them," said Michael Dominy, a senior analyst with Boston-based Yankee Group.

SAP is rolling out its Safe Passage program, allowing new Oracle Corp. customers to trade in their PeopleSoft or JDE licenses for mySAP ERP licenses.

Under the program, those customers who make the switch to SAP, would receive a credit equal to 75% of the license price that they paid with PeopleSoft or JDE. In addition, they are charged a maintenance fee, based on 17% of the total mySAP license value.

"We've seen the promises on the other side, yet we've delivered," said SAP America CEO Bill McDermott, during a press conference Wednesday. "We've delivered a standards-based, integrated platform since 2003."

McDermott said customers choosing SAP would not be forced to migrate immediately. Both the current versions of PeopleSoft and JDE products will be fully supported, he said.

"The program follows the same logic as we apply to our existing SAP customers as we provide an upgrade path to our existing platforms," McDermott said. "We're not forcing them to withdraw from their existing applications, rather they can keep going with their license and decide at the time when they want to get out of their current applications."

SAP, Wednesday, also acquired TomorrowNow Inc., a third-party support provider for customers running PeopleSoft and J.D. Edwards (JDE) software.

McDermott said SAP is first targeting customers who have existing SAP applications and use a mix of PeopleSoft HR applications or JDE software. Initial migration for those customers to a complete SAP stack would be less painful, McDermott said.

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Although Oracle hasn't yet announced any discount programs to get customers to migrate to Oracle's E-Business Suite, Oracle CEO Larry Ellison assured customers this week that his company would continue to support and develop PeopleSoft and JDE products through 2013. Analysts, however, expect Oracle sales reps to offer deep discounts to customers considering Oracle's software suite.

"Former PeopleSoft customers are getting lots of attention and some very attractive choices," said Jim Shepherd, vice president of research at Boston-based AMR Research Inc. "There is no question that this battle between Oracle and SAP promises to give companies considerable negotiating leverage, which may be the best companies can hope for when their vendor is acquired."

Users, who have been listening carefully to Oracle executives, said they are prepared to negotiate better deals. Daniel Levinthal, a former member of the PeopleSoft Mid-Atlantic Regional Users Group and IT manager at a Virginia-based retailer, said his firm is currently considering its options.

"We've been holding out for some time now," Levinthal said. "I'd expect most shops to take their time in order to make the right decision."

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