In-Depth

Oracle's Integration Strategy: It's All About "Fusion"

Oracle’s roadmap still leaves some questions unanswered—particularly for J.D. Edwards users. Company spokesmen reiterate support for existing users until at least 2013.

• By Stephen Swoyer
• 01/25/2005

For some customers of the former PeopleSoft Corp., the wait is over. That’s because Oracle Corp. last week announced plans to merge all three of its application code-bases—the Oracle E-Business Suite, PeopleSoft Enterprise, and EnterpriseOne (formerly developed by J.D. Edwards & Co.)—into a new platform called, aptly enough, “Fusion.”

Oracle CEO Larry Ellison, along with Oracle presidents Safra Catz, Charles Phillips, and others, were on hand to officially mark the launch of the combined Oracle and PeopleSoft.

For customers of the former PeopleSoft, as well as J.D. Edwards, there was a lot to like in what the Oracle executives had to say. For starters, Oracle reiterated its promise—first tendered nearly two years ago—to continue to support and enhance all three product lines until 2013.

“We’re certainly not going to de-support before 2013, and we should get together and talk about whether we should extend it beyond 2013,” Ellison said. “We may, in fact, de-support it in 2013.”

Of crucial concern to the very large and ardent J.D. Edwards installed base --which often seemed like an afterthought during Oracle’s 18-month pursuit of PeopleSoft—the database giant pledged to finish developing the next major revision of the J.D. Edwards software, EnterpriseOne 8.11, and also deliver a subsequent iteration, to be called 8.12.

Fusion: Java-based SOA

Much of last week’s event was given over to promoting Fusion, which Oracle positions as a Java-based, service-oriented architecture that will install in the form of an automated upgrade—not a conversion, Ellison emphasized—for existing Oracle, PeopleSoft, and J.D. Edwards applications. The first Fusion-based applications are slated to appear by 2007, with the full suite promised for 2008. PeopleSoft originally codenamed its plan for a merged PeopleSoft/J.D. Edwards code base “Project Fusion,” and in this case, Oracle retained the name.

While it works on Fusion, Oracle has pledged to deliver major updates for each of its Oracle, PeopleSoft, and J.D. Edwards product lines—by 2006, no less. PeopleSoft customers can expect Oracle to finish work on Enterprise 8.9 and also deliver an Enterprise 9.0 offering by the end of next year. Likewise, Oracle customers can expect version 12 of the Oracle E-business Suite. J.D. Edwards users have at least two more updates to look forward to.

“If you’re a J.D. Edwards customer, we’re going to go ahead and finish development of J.D. Edwards 8.11, and when that’s finished, based on 8.11, we’re going to go ahead and using existing technologies develop J.D. Edwards 8.12,” Ellison said. “We’re going to preserve your investment in PeopleSoft products. We’re going to preserve your investment in J.D. Edwards’ products. We’re going to preserve your investment in Oracle products.”

Ellison also sought to allay the concerns of PeopleSoft and J.D. Edwards users who aren’t also Oracle customers. Given Oracle’s emphasis on the primacy of its flagship database offering, many of these customers have expressed concern that the company might eliminate support for third-party databases from IBM Corp. and Microsoft Corp., among others. Ellison said customers have nothing to worry about on that front—until 2013, that is.

“There’s been some concern because we’re a large database company, we have a large application server business, … that we we’re going to somehow coerce our customers to migrating from a DB2 or SQL Server implementation of PeopleSoft products or an AS/400 implementation of the J.D. Edwards product, we were going to somehow nudge you, coerce you, push you into adopting the Oracle database and Oracle middleware,” he acknowledged. “We certainly would be thrilled if you chose to use the Oracle database and be thrilled if you chose to use our middleware, but we’re not going to nudge you in that direction.”

J.D. Edwards Users Still Skeptical

This is likely to be of little consolation to many J.D. Edwards customers, however, given that platform’s long-standing popularity in AS/400 or iSeries shops. After all, iSeries ships with a bundled database (IBM’s DB2), so these customers have little incentive to look elsewhere for a relational datastore. As a result, DB2 enjoys a near-monopoly on Big Blue’s midrange server platform; Oracle, for example, doesn’t even offer a version of its 10g database for iSeries. The upshot, then, is that if Oracle decides it won’t support DB2, J.D. Edwards customers on iSeries may have to mull a platform change.

Perhaps with the iSeries in mind, Ellison seemed to grasp for words as he reiterated Oracle’s pledge to support IBM’s database and middleware offerings. “Our intention is to keep supporting the IBM database and IBM middleware, for as long as—up until 2013 at least,” he said.

So what are iSeries customers to do after 2013, assuming, of course, that that platform is still viable? Mike Schiff, an Oracle veteran and senior analyst with consultancy Current Analysis, takes a pessimistic view. “I suspect that what Oracle will claim is that they’re willing to support the product itself, J.D. Edwards, but you’re going to have to go to the database vendor, in this case IBM, for some support,” he speculates. “It almost sounds like a reasonable claim, but the question is, if there’s a problem, will they pass the buck to the database vendor?”As a result, Schiff and other analysts suggest that Oracle will be hard-pressed to win the trust of many long-time J.D. Edwards-on-iSeries customers.

Some, like Mike Crump, a manager with a materials handling manufacturer, are already preparing to throw in the proverbial towel. “As an iSeries customer running J.D. Edwards World software I fully expect the worst,” he says. “I suppose it comes across as sour grapes, but I fully believe that Oracle is diametrically different when compared to IBM and J.D. Edwards. I believe that the combination of iSeries and World software is the easiest to manage, the most cost effective, the most stable, and the most secure.”

Crump says he doesn’t think his company can realize the same cost efficiencies on any other platform. “I'm interested in business benefits, and I just don't see them forthcoming. We have a 3.5GB database environment that takes less than 5 percent of one person's time to manage—Oracle isn't even in the same ballpark,” he confirms. “When you have an IT budget that is less than one-half of the industry average, I think Oracle can only make it worse. When you have an IT staffing level at 40 percent of the industry average, I think Oracle can only make it worse. These are very typical results in the iSeries environment.”

A J.D. Edwards-on-iSeries user with a prominent manufacturer of recreational products says that he plans to keep an open mind—for now. “We echo the statement of taking a wait-and-see attitude, but if Oracle requires the use of their database, we will pursue other ERP systems,” he asserts.

What’s in the Cards

For what it’s worth, says Robert Kugel, an analyst with consultancy Ventana Research, Oracle has every incentive to do right by the customers of the former PeopleSoft and J.D. Edwards.

“It really is in their best interest, if people are paying maintenance, to keep them happy,” Kugel says. “So when the Oracle executives swear up and down that they’re going to support DB2 and BEA and Tuxedo and everything, again, rationally, there’s reason to believe that that’s exactly what they intend to do.”

At the same time, Kugel concedes, “there was a lot more emphasis placed on the PeopleSoft portion of the PeopleSoft and J.D. Edwards equation, but they did from time to time talk about what the implications are for J.D. Edwards, too.”

At last week’s media blitz, Ellison conceded—in a roundabout way—that maintaining three separate code bases and developing a new, hybrid code base is a daunting task. Nevertheless, he said, Oracle is up to the challenge. “We have over 50,000 employees, and we have the wherewithal, the financial and human resources, to follow both lines of development,” he asserted. “We can continue to develop all three lines of products while simultaneously developing a successor, merged suite of products. We have enough people to do it, we have the financial resources to do it.”

Kugel, for his part, doesn’t think Ellison is being overly optimistic. “The maintenance [on Oracle, PeopleSoft, and J.D. Edwards applications] is very profitable, so they get these economies of scale as they develop this next-generation product,” he argues. “Anyone who thinks that it’s a very difficult thing to maintain all of these different code bases had better look at the amount of money they have to play with. From that perspective, it’s not that hard at all.”