By Dawn Kawamoto and Alorie Gilbert
Wednesday, January 19 2005 09:30 AM
URL: http://www.zdnetasia.com/news/software/0,39044164,39213861,00.htm

REDWOOD CITY, Calif.--A week and a half after closing its long-sought PeopleSoft acquisition, Oracle on Tuesday unveiled plans for the product lines it will support, a new development road map and other details.

In a presentation Tuesday for analysts, customers and reporters, the database giant addressed some of the concerns that have been weighing on the minds of PeopleSoft customers, and offered a glimpse into how Oracle plans to move forward following the close of the US$10.3 billion buy.

For Oracle, the success of the deal will depend on how well it can entice customers of the former PeopleSoft and J.D. Edwards & Co. to switch to its own software and, for those who don't switch, its ability to persuade them to stay with Oracle for their support rather than jump to a third-party vendor. J.D. Edwards is a software company that PeopleSoft had bought in 2003, shortly before Oracle set its sights on PeopleSoft.

Throughout his presentation, Larry Ellison, Oracle's chief executive, stressed "continuity" as though it were a mantra.

"If you're an existing Oracle, PeopleSoft or J.D. Edwards customer, continuity is very important to us," he said. "We'll preserve your investment in PeopleSoft, we'll preserve your investment in J.D. Edwards, and we'll preserve your investment in Oracle. Our intent is not only to support the current PeopleSoft and J.D. Edwards and Oracle products into the next decade, but we also plan to continue to enhance those products for years to come."

Ellison said Oracle can juggle four balls at once: development and support of PeopleSoft, J.D. Edwards and Oracle products, as well as a combination product currently being called "Project Fusion."

"In addition to continuing the development of three existing product lines, we will develop a combined product of J.D. Edwards, PeopleSoft and Oracle to build a super suite of applications, if you will," Ellison said. "We are a large company (and) have the wherewithal to continue development of three product lines while developing a successor, (a) merged product."

In mid-December, PeopleSoft's board of directors approved the Oracle buy, transforming what had been a contentious hostile merger battle, one that had begun 18 months earlier, into a comparatively friendly deal.

It was a battle that cost PeopleSoft's former chief executive, Craig Conway, his job. It also entangled antitrust regulators in both Europe and the United States.

Since it became clear the deal would go through, customers of the former PeopleSoft have been anxious to hear how and whether Oracle would support its products. On Tuesday, executives attempted to soothe those fears.

Plans call for products of the former PeopleSoft and J.D. Edwards to have more than 3,000 developers working on continued development of those tools, though those developers will also work on Project Fusion, the combination product. Meanwhile, more than 5,000 developers will handle Oracle products, while also working on the combination product.

Oracle announced Friday it would retain 90 percent of PeopleSoft's development and support staff, even though it was cutting 5,000 jobs from the combined company.

Ellison and a handful of other executives speaking at Tuesday's event emphasized the scale of the combined company, which together employs nearly 50,000 workers, supports 23,000 applications customers and has 1,300 applications partners.

Its new size should help the company compete better with big rivals, namely Germany's SAP.

Oracle President Charles Phillips, who spoke after Ellison, said the company will not let transition work related to the acquisition distract it from taking good care of customers.

"We're externally focused and open for business," Phillips said. "It's more important that we solve your needs."

Staying friends with IBM
Phillips also pledged to nurture new partners gained in the merger, including IBM--an Oracle foe in the database software market. Specifically, some future Oracle products will run on IBM's iSeries server software line, he said.

"Our partnership with IBM will hopefully get a lot better going forward," Phillips said.

Ellison said that current plans call for completing development on PeopleSoft Enterprise 8.9 this year, which will then be followed by the

development and release of PeopleSoft Enterprise 9.0 next year. These products will rely on PeopleSoft tools and code base, Ellison said.

J.D. Edwards EnterpriseOne 8.11 is also being finished, with version 8.12 expected in 2006. Oracle also plans to dole out J.D. Edwards World Enhancements on a continual basis.

Meanwhile, Oracle has just finished 11i.10 and will start Oracle E-Business Suite 12.0 next year.

While these three product lines continue to be enhanced simultaneously and separately, a combined group of developers from all three product lines will work on Project Fusion, which will be based on an open-standards environment.

The merged product will use "standards-based technology," Ellison said. "This will allow easy integration with other applications."

Oracle said Project Fusion will be based on Java and combine features from its own applications software, as well as from products that were sold by PeopleSoft and J.D.Edwards.

Project Fusion components, such as data hubs and transaction bases, are expected to be available next year. The initial Project Fusion applications are set for release in 2007, with a full applications suite to come the following year.

Ellison also outlined a support timetable for PeopleSoft and J.D. Edwards products.

PeopleSoft Enterprise, as well as J.D. Edwards EnterpriseOne and World products, will be supported through at least 2013, he said.

"We believe PeopleSoft and J.D. Edwards customers will pick a time before 2013 to migrate to the combined product," Ellison said. "We believe people will have a graceful upgrade to Project Fusion."

Oracle, meanwhile, is extending J.D. Edwards EnterpriseOne XE and 8.0 support to February 2007, which is longer than the support timetable PeopleSoft had had for the products.

Oracle, however, has adopted PeopleSoft's retirement schedule for its other products and versions, including J.D. Edwards World.

Oracle will also continue to support middleware, or infrastructure software, from IBM and BEA Systems--software that was previously used in PeopleSoft and J.D. Edwards products. Oracle will also support the database technology of rivals IBM and Microsoft, which were partners of J.D. Edwards and PeopleSoft.

"We certainly would be thrilled if you chose Oracle's database and middleware, but we will continue to support (the) IBM database and middleware until at least 2013...unless IBM goes out of business before then. But for now they look pretty safe," Ellison quipped.

Corner office shakeups
Oracle confirmed that, as previously reported, it has chosen John Wookey, an Oracle senior vice president, to serve as head of its business applications software efforts. Wookey replaces long-time Oracle applications head Ron Wohl.

Oracle, which derives a large percentage of its revenue from its core database business, also confirmed that it has named Juergen Rottler as executive vice president of global support services. He replaces Michael Rocha, a 15-year Oracle employee. Rottler had been hired in September to oversee Oracle's on-demand business unit.

Although it's adding more developers to the mix as it seeks to complete the latest PeopleSoft upgrade, Oracle previously had announced plans to cut its overall research and development budget by US$150 million for the combined company. The cuts are expected to be evenly distributed between Oracle and PeopleSoft development.