In-Depth

Oracle’s Reputation Among IT Buyers Dips

Negative opinions increase as database company fights for PeopleS

• By Stephen Swoyer
• 08/05/2003

Techtel publishes a quarterly Technology Demand Index that tracks brand and solution strength among IT buyers at between 800 and 1000 different companies.

Last week, Techtel published its Q2 2003 version of the Index. Techtel's survey found that Oracle’s positive opinion among IT buyers dipped from 59.8 to 57.2 percent. Perhaps more tellingly, Techtel found, Oracle’s negative opinion increased substantially—from 14.5 percent to 19.7 percent between Q1 and Q2. The upshot? Oracle’s net positive opinion among IT buyers plunged by 17 percent from Q1 to Q2, dropping from 45.4 percent to 37.5 percent.

Not surprisingly, Oracle’s loss was PeopleSoft’s gain. The embattled vendor’s esteem among the IT organizations that TechTel surveys increased by more than 16 percent during the same period, jumping from a 34.1 percent positive opinion to 40.2 percent. Even the number of organizations that are inclined to view PeopleSoft negatively dropped slightly, from 13.1 percent to 12.9 percent. From Q1 to Q2, PeopleSoft enjoyed a 30 percent spike in net positive opinion among prospective IT buyers, jumping from 21 to 27.4 percent.

Oracle is an unpopular brand among PeopleSoft shops that don’t have an existing investment in the company’s technology. At the same time, however, some existing customers appear to have written off Oracle’s takeover of PeopleSoft as a fait accompli—which hurts the embattled company. One user of PeopleSoft’s PeopleSoft 8 HRMS, FDM, and CRM modules told us that his company is now taking a closer look at competing solutions from German ERP vendor SAP AG. “We have no Oracle software … If the takeover is successful, I don't think we would go with Oracle. We have too big of an investment in DB2 at this point. My guess … is that we would go with SAP.”

Some shops have put their concerns—if any—about Oracle’s behavior aside and are assessing application suites based largely on their merits.

Noel Cook, an administrator with health care managed services provider Extendicare Inc., says that prior to Oracle’s announcement, his company had narrowed its choices of packaged application suites down to PeopleSoft and Oracle, with PeopleSoft in the lead.

Since the database giant embarked on its hostile take-over bid, Cook relates, his company is now more inclined to opt for an Oracle-based solution. That’s because he doesn’t believe that the database vendor will be able to support PeopleSoft’s application stack over the long haul. “I don't believe they could support two different packages, so the current PeopleSoft customers have a legitimate concern,” he notes. “At some point in the future, Oracle would have to pressure them to switch, but they can make the transition much less painful by building migration paths and incorporating some of the PeopleSoft ways of doing things.”

Antitrust Scrutiny, Round Two

Also last Friday, The Wall Street Journal reported that state attorneys general have agreed to cooperate in an antitrust probe of Oracle’s hostile takeover attempt of PeopleSoft.

At least one state (Connecticut -- which has a $100 million contract with PeopleSoft) has already filed suit in an attempt to block Oracle’s bid. The Journal said that California, New York, and Texas are among the states participating in the joint probe. Connecticut’s pending legislation prevents it from taking part in the joint antitrust action initiated by other states, the Journal reported. At least one of these states (Texas) is also a PeopleSoft customer.

Related Articles:

Price Rises in Oracle’s Pursuit of PeopleSoft http://info.101com.com/default.asp?id=2314

Oracle Reassures Users as PeopleSoft Acquires J.D. Edwards http://info.101com.com/default.asp?id=2212

Oracle Sweetens Bid for PeopleSofthttp://info.101com.com/default.asp?id=1986

Oracle vs. Peoplesoft: The Hostility Factorhttp://info.101com.com/default.asp?id=1802