Customers Not Confident Of Oracle-PeopleSoft Integration

InformationWeek

Nearly two-thirds of the 310 PeopleSoft customers say they're "not at all confident" that Oracle will successfully integrate PeopleSoft's products into its own. Thirty percent are "somewhat confident," and only 5% were "highly confident" Oracle can pull it off.

Perhaps even more telling, 51% of the 270 Oracle customers are not at all confident that PeopleSoft and Oracle products will be successfully integrated. Forty-two percent are somewhat confident, and only 7% highly confident.

Just about half (49%) of all those surveyed say termination of PeopleSoft products is the one thing they're most concerned that Oracle will get wrong in the aftermath of the acquisition. Nineteen percent cited support and service, while 13% cited the need to retain critical PeopleSoft talent.

"There is a chance this can work," says Robert Robinson, business systems supervisor at Durr Industries Inc., a manufacturing capital equipment maker that uses applications from J.D. Edwards, which PeopleSoft acquired in July 2003. But the most-critical factors will be the quality of Oracle's support services for PeopleSoft customers and how well the vendor maintains relationships with independent J.D. Edwards and PeopleSoft user organizations.

"The secret sauce to success, from my viewpoint, is maintaining that whole support system," Robinson says.

Those surveyed agree: Forty-six percent of Oracle and PeopleSoft customers combined say service and support is the one thing that Oracle must get right in order to make the acquisition a success from a PeopleSoft customer standpoint. Twenty-three percent say retaining PeopleSoft talent is most critical, while 6% cited integration tools and 6% said licensing options.

But most PeopleSoft customers seem willing to give Oracle a chance to prove itself. Sixty-one percent of the surveyed PeopleSoft users say they'll listen to Oracle's upgrade plan before shopping around for another vendor, while only 11% say they won't wait.

Nevertheless, 40% of all those surveyed said the acquisition will have a "somewhat negative impact" on their organization's application strategy, and 16% said it will have a "very negative impact." Thirty percent said it will have no impact, and only 14% said it will have a "very positive" or "somewhat positive" impact.