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Wait and see time for PeopleSoft users

With Oracle promising support until 2013, PeopleSoft customers can take their time in deciding whether to stay, move to Oracle or go to a new vendor entirely.

Last November, as talk over PeopleSoft Inc.'s future, or lack thereof, dominated business headlines, the state of Delaware made a commitment to add a significant number of the company's financial software modules to its technology portfolio.

While it became ever more likely that Oracle Corp. would take over its rival and discontinue its product line, Delaware went ahead with its planned purchase. Holding off on the new technology really wasn't an option.

"The reality is you can't," said Tom Jarrett, Delaware's chief information officer. "We had made such a significant investment in PeopleSoft we didn't see a reason to stop and change direction."

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While PeopleSoft was offering a Customer Assurance Plan that promised two to five times a customer's license costs -- should the company be acquired and its product line discontinued -- Delaware did not sway from its plan, Jarrett said.

"We're in a world where mergers seem to be a way of life," Jarrett added. "We felt we could not stop moving forward and didn't see anything that gave us significant heartburn."

So Delaware added financials to its PeopleSoft human resources and payroll software. Delaware is an Oracle customer as well, but didn't feel the company's applications product line had what the state needed.

The state got some good news last week, when Oracle promised  support for PeopleSoft products through 2013 as well as an upgrade.

In fact, Delaware might be in a good position since it recently upgraded some of its older PeopleSoft applications.

Delaware's decision was the right one, according to Liz Roche, an analyst with Stamford, Conn.-based Meta Group.

"At this point, organizations that are PeopleSoft customers should be much more comfortable," Roche said. "[Oracle is] going to stick to PeopleSoft's sunset strategy. The bottom line is if it was happening under PeopleSoft, it's happening under Oracle."

Companies on older versions of PeopleSoft, or even applications from companies PeopleSoft acquired like J.D. Edwards & Co. or Vantive, will have to make a tougher decision, but they bought some time with Oracle's announcement last week. Companies that were considering upgrades or purchases of PeopleSoft applications, particularly CRM and HR, should continue with that process, Roche said. While the Oracle salesforce will most likely start pushing Oracle applications over PeopleSoft, you can bet they'll take anyone's money, whether it's for their applications or PeopleSoft's, she added.

Existing customers might even be in for some good news on the maintenance fees front. Just last week, Germany's SAP AG purchased TomorrowNow Inc., one of the largest independent PeopleSoft support organizations. SAP is offering 17% maintenance fees, 2% below what PeopleSoft was offering. Oracle will have to compete on price if it wants to keep its maintenance revenue, Roche said.

Eventually everyone, including PeopleSoft and Oracle customers, will be steered toward  Project Fusion, the combined technology of the two companies, Roche warned.

That doesn't mean Oracle will keep all its customers. Already, competitors like Lawson Software, in St. Paul, Minn., and SAP are offering migration programs  that will ultimately benefit end users.

Additionally, Oracle is going to have to work hard to keep the smaller, former J.D. Edwards & Co. customers like Brigham's Inc., an ice cream company based in Arlington, Mass. Brigham's is holding tight for right now to see how things play out.

"We don't need a new upgrade but would probably not stay with either [Oracle or PeopleSoft] if we did," said Shelley Terrizzi, controller. "I don't feel that, for the size of business we are, we need a company as big as that."

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