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Oracle-PeopleSoft decision rocks World

The decision allowing Oracle to go forward with its takeover attempt of PeopleSoft means former JD Edwards customers must continue to wait for news of their future.

Once they were JD Edwards & Co. customers. In July 2003, they became users of PeopleSoft Inc. when the Pleasanton, Calif., company acquired their former vendor. And if Oracle Corp. has its way, people running the former JD Edwards applications will soon have a new vendor.

It hasn't been an easy year for PeopleSoft customers, particularly users of the World and EnterpriseOne applications, PeopleSoft's products for iSeries users and the midmarket. Now that U.S. District Court Judge Vaughn R. Walker has ruled against the Department of Justice and cleared the way for Redwood Shores, Calif.-based Oracle to proceed with its hostile takeover attempt, they find themselves waiting again.

Potentially it could be very costly.
Perry Mullinix
ERP/JDE program managerGilead Sciences Inc.

They are waiting for a decision on whether the Department of Justice will appeal, whether PeopleSoft's board of directors will accept the current offer and whether the European Commission will follow the lead of the United States allowing Oracle to proceed. And many of them are waiting to make technology investments.

"They'll be on hold and unhappy," said Yvonne Genovese, a research vice president at Stamford, Conn.-based Gartner Inc. "This is what customers should be doing. They should be waiting as long as they can in taking out what they have and putting in something else."

Some customers found Thursday's news more troublesome than others.

"I think the decision was a poor one," said Perry Mullinix, ERP/JDE program manager for Gilead Sciences Inc., a biotech company in Foster City, Calif. "There is no immediate effect on our business plans. Potentially it could be very costly."

For others, whoever winds up taking ownership of JD Edwards' technology is not important right now. Kurt Cuff, application development manager with Sundt Construction Inc. in Tucson, Ariz., was surprised at the ruling but called the ultimate vendor "immaterial."

Sundt has been focusing its IT projects on using the data from its JD Edwards applications and developing a Web application with Web services, Cuff said.

More waiting is also the advice from Quest International Users Group, the former JD Edwards users group based in Lexington, Ky., said the group's new president Fred Pond.

"It's a tough thing when you're trying to run your business," Pond said. "Sometimes we can't hold off on things."

Yet many companies have had to go ahead with strategic technology decisions in the past year despite the uncertainty.

"It's been painful," Pond said. "With change comes pain. This leaves it more of an unknown. If it had gone the other way, we would have known the lay of the land for the foreseeable future."

It is painful enough that some customers may leave. Already there have been reports that the struggle has harmed Oracle's image and affected sales. Should Oracle prevail, Gilead would consider adopting a different application platform, Mullinix said.

"We had Oracle and it doesn't work," he said. "The database is broken and the systems don't work together. It was an expensive adventure for us. We would have to make a strategic decision to go with a vendor that has a long-term strategy in place."

That decision may be four or five years away, but it is a hard one for buyers, Genovese said.

"Switching software isn't a trivial thing," she said. "We're talking about applications that get ingrained -- you just don't decide to take it out and use something else. Customers may be holding on major investments in the vendor, but in the software itself they're moving forward."

In the meantime, Oracle appears to be slowly reaching out to the iSeries and midmarket customers. While Oracle's efforts initially seemed to focus on PeopleSoft's enterprise customers, they have made an effort to communicate to the others, said Pond and Cuff.

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