In-Depth
When Oracle Attacks: J.D. Edwards Shops Brace for the Worst
Many long-time J.D. Edwards users are bracing themselves for the worst while hoping for the best
As of last month, Oracle Corp.’s acquisition of PeopleSoft Corp. was a foregone conclusion. Many PeopleSoft users, of course, have resigned themselves to Oracle’s triumph, and some have even been mollified by the database giant’s reassurances of new product development and continued support.
But for users of software from the former J.D. Edwards Co., which PeopleSoft acquired in June of 2003, more questions than answers remain. Many users say they were ambivalent about PeopleSoft’s acquisition of J.D. Edwards in the first place, and now that Oracle is in the driver’s seat of both companies, some confess to feeling trapped in a situation that’s beyond their control.
While Oracle has been very forthcoming about its plans to enhance PeopleSoft’s technology stack and support that company’s existing customers, it hasn’t been nearly as forthcoming on the subject of J.D. Edwards. It sort of makes a user wonder.
“We ex-JDE users have to realize that we are the minnow that was gulped by the seal that was devoured by the shark. Those that witness this occurring in nature have sympathy for the seal, but no one remembers the minnow,” says Robert Robinson, a business systems supervisor with Durr Industries Inc. Robertson has been using J.D. Edwards software for almost two decades, and currently sits on the board of directors of the Big Ten Regional Users Group.
Like other J.D. Edwards users, Robertson cites Oracle CEO Larry Ellison’s public statements at the outset of Oracle’s hostile takeover attempt as a potentially ominous harbinger. “If anyone remembers Larry Ellison's comments at the time that the acquisition was proposed, he talked about ‘voiding the J.D. Edwards purchase’ and ‘buying, then retiring the PeopleSoft line.’ He has been more conciliatory in word lately, but we also remember FoxPro, that nifty database that was bought up then killed by Microsoft.”
An All-but-done Deal
By the start of last week, Oracle had acquired more than 89 percent of PeopleSoft’s shares, and officials hoped to garner a full 90 percent before the expiration of its tender offer last Thursday. Once Oracle controls 90 percent or more of PeopleSoft’s shares, it can avoid putting the merger to a shareholder vote, which could drag things out for another four to six weeks.
After an initial round of inflammatory rhetoric, Oracle officials have been downright conciliatory toward PeopleSoft users. There are signs the same thing could be happening on the J.D. Edwards front, too. For starters, Oracle has signaled a willingness to retain J.D. Edwards development talent. “We are hearing about a lot of J.D. Edwards resumes on the street—people [who were] let go by PeopleSoft—and we want to [retain] as many folks as we can,” said Oracle President Safia Catz during remarks at last month’s Oracle OpenWorld. “Our big worry is the intellectual property and development organization at [J.D. Edwards], and our hope is it is still in a position where we can maintain it.”
Catz also had encouraging news for users who fear that Oracle plans to eighty-six PeopleSoft’s J.D. Edwards technology assets.
“We have no intention of spinning off Enterprise One or any of the products," she said. “We will bring them in, evaluate the state of the code and bring it ultimately into a converged product line.”
The Future’s Uncertain and the End is Always Near
For the J.D. Edwards community, a climate of uncertainty has become the norm. “We were concerned at how [PeopleSoft’s acquisition of J.D. Edwards] would affect the confidence of potential clients to buy licenses and for existing clients to upgrade,” says Mark Brown, a principal at J.D. Edwards consultancy Krofire. “We turned out to be right about the resulting quiet spell, but we became a lot happier in the intervening time. The takeover did not result in any actual downgrading in product status, and the clients' confidence returned.”
Brown believes that Oracle’s takeover could have a similar effect. “Reflecting the experience from June 2003, we are more concerned about the uncertainty this causes in the marketplace than by any actual impact upon the product,” he says. “We have residual concern about what Oracle might do in the long, long term but know, realistically, that they aren't going to replace the product set.”
Other J.D. Edwards professionals aren’t so sure. “I was not very pleased about the acquisition of JDE by PeopleSoft, but viewed it as the lesser of two evils—compared to a takeover by Oracle,” says Don Sauve, a systems administrator with a manufacturing company in Washington state.
Now that Sauve’s worst-case scenario has come to pass, he’s pessimistic about the fate of the former J.D. Edwards. “I believe that Oracle will let existing JDE customers continue to run their current systems, and even up through 8.11. However, any new functionality, in the form of a new release, will probably require use of the Oracle toolset,” he says. “They may also technically or financially try to force customers into use of the Oracle database; however, we're already an Oracle database shop, so I'm not too worried about that issue.”
Larry Jones, a J.D. Edwards professional with Wagstaff, a manufacturer of precision machine tools, has an even more pessimistic take on Oracle’s ascendancy. “I think Larry Ellison's initial statements and position on the PeopleSoft and JDE product lines reflect Oracle's real intentions here,” he comments, arguing that Oracle acquired PeopleSoft to eliminate competition, extract maintenance revenue from the acquired customer base, and transition premium customers from PeopleSoft and J.D. Edwards to Oracle products.
“Basically, the latest statements from Oracle have promised nothing beyondfinishing existing projects [or] product upgrades,” he concludes. “It’s clear to us that our investment in the EnterpriseOne product is at risk.”
At the same time, some industry watchers point out that Oracle has at least gone through the motions of reaching out to existing J.D. Edwards customers. In fact, some users say, Oracle has been more attentive to their concerns than parent company PeopleSoft. “Oracle has definitely been in communications with Quest [the J.D. Edwards advocacy group], something which PeopleSoft fell flat on their face doing. To take a longstanding user-based organization and snub them like PeopleSoft did only alienated customers,” says Sauve. “I'm glad to see that Quest may, indeed, have a viable future with Oracle. Beyond Quest, however, I haven't seen much outreach directly to JDE users, other than the typical early-on platitudes of continuing support structure.”
Even so, says J.D. Edwards veteran Robertson, Oracle’s outreach to Quest and other organizations may just be a formality. “Oracle has contacted Quest—the JDE advocacy group—and ICAB, the PeopleSoft advocacy group,” says Robertson. “I was on a conference call with ICAB yesterday. Again, the right things were said, but on issues such as extended support for [OneWorld] Xe beyond [February of this year] and IBM DB2 versus Oracle's database, no concrete answers were given.”
An iSeries Mainstay
As it turns out, ongoing support for IBM’s DB2 database is of particular interest to many J.D. Edwards users, given that platform’s historical roots on IBM’s AS/400 and iSeries midrange systems. iSeries ships with its own version of DB2, and is typically deployed in the very markets—especially manufacturing— in which J.D. Edwards has a very strong presence.
Oracle, of course, has a vested interest in getting customers to run their ERP, CRM, BI, and other systems on top of its flagship database. Because of this, there’s concern among many J.D. Edwards users that they’ll be forced to adopt Oracle 10g—or some other version of the Oracle database—if they want long-term support. As long-time J.D. Edwards users Robertson has points out, Oracle has been conspicuously mum on this very subject.
Even so, some users have been expecting the demise of J.D. Edwards on iSeries for a long time before Oracle’s triumph. “I was very worried about [PeopleSoft’s] acquisition [of J.D. Edwards] because we are an IBM midrange shop,” says a J.D. Edwards user with a manufacturer of materials-handling solutions. “In my opinion, it signaled the ‘beginning of the end’ of JDE World software on the IBM midrange platform.”
This J.D. Edwards user says he’s keeping his options open. “[W]e haven't had many support problems since [PeopleSoft’s] takeover, but that hasn't changed our outlook for possible future migration to another midrange-based package.”
Customers Likely To Stick It Out
Many J.D. Edwards customers have been using that company’s software for almost two decades. As a result, they have hundreds of thousands of person-hours invested in the development and management of J.D. Edwards-based solution. Not surprisingly, then, they’re not in any hurry to move to another platform. “[My clients] have invested so much in the product and its implementation that they have no intention of doing anything further unless absolutely forced to,” says J.D. Edwards consultant Brown. “These projects have enormous momentum and can't be stopped. No one believes they will be forced to make any changes in the short-to-medium term.”
What’s more, Brown says, many J.D. Edwards shops have become inured to unpredictability as a result of the PeopleSoft takeover. “Most current clients have worked through their personal demons after the PeopleSoft takeover, so the Oracle affair is 'more of the same,’” he points out. “It won't influence them much on current work. The established client-base will do absolutely nothing and wait and see. After all, they outnumber Oracle thousands to one. They pay maintenance and this valuable revenue stream is not going to be jeopardized.”
In the final analysis, says Ajit Nadgouda, a J.D. Edwards professional with Access Interactive, Oracle has much to gain if it does right by former J.D. Edwards and PeopleSoft users.
“If Oracle doesn't support [the] JDE product, the users might lose faith in Oracle. Had this confidence been given earlier, this merger would have happened long ago. It took so much time just because PeopleSoft and JDE did not get the confidence that Oracle would support the products,” he notes.
What are the chances that Oracle can entice former J.D. Edwards customers to transition over to its own products? Not good, says Nadgouda: “I don't think JDE customers would like to change the platforms from JDE to Oracle. If Oracle stops the support, they would change to SAP.”