Oracle: We'll support J.D. Edwards users

Oracle promises to support business software from J.D. Edwards, a rival software company that Oracle buyout target PeopleSoft is expected to acquire.

Alorie Gilbert
Alorie Gilbert Staff Writer, CNET News.com
Alorie Gilbert
writes about software, spy chips and the high-tech workplace.
3 min read
Oracle pledged support Thursday for business software made by J.D. Edwards, a rival company that Oracle buyout target PeopleSoft is expected to acquire.

Oracle, which launched its hostile takeover bid for PeopleSoft last month, just days after PeopleSoft announced a deal to acquire J.D. Edwards, has promised to maintain PeopleSoft technology for at least 10 years and to not force thousands of customers to use Oracle's competing products. Oracle extended that promise to nearly 6,700 customers of J.D. Edwards, whose merger with PeopleSoft is expected to close Friday.

"Should that (PeopleSoft-J.D. Edwards) transaction close, and we buy the combined company, J.D. Edwards (customers) will be treated the same way," said Charles Phillips, Oracle's executive vice president.

Oracle invited PeopleSoft customers to submit their questions about its acquisition plans via e-mail as part of a virtual "town hall" meeting on Thursday. Phillips, a seasoned Morgan Stanley analyst who joined Oracle in May, fielded the e-mail questions by teleconference. Oracle did not identify who sent the questions.

The town hall meeting was part of an ongoing customer outreach campaign by Oracle to mend relations with 5,100 PeopleSoft customers. Many of them were angered by initial comments from Oracle CEO Larry Ellison about his intention to discontinue PeopleSoft software. Oracle later said it planned to support and update the current version of PeopleSoft's applications, which are used by companies to run accounting, human resources and other key operations, for another decade.

Some PeopleSoft users have expressed doubt that Oracle will stand by that pledge. They also worry about the level of support and maintenance that Oracle would provide for PeopleSoft technology, the cost of moving to another set of applications when Oracle's support runs out, and the lack of competition in a market recast by Oracle. Earlier this week, Ellison said customers who buy PeopleSoft business applications "will have bet on the wrong horse" if Oracle's bid is successful.

During Thursday's question-and-answer session, Phillips sought to counter the skeptics.

"Our public commitment is a good insurance policy," Phillips said of the 10-year support pledge.

"There is no way we?d back off from that," he added. "We think we?re on the hook, and we're glad we?re on the hook, because that was part of our plan."

Winning the support of PeopleSoft customers is critical for Oracle as it seeks to prevail in its highly contentious acquisition bid, which is being reviewed by antitrust regulators. PeopleSoft customers concerned about having fewer choices in the business applications marketplace could become central to the antitrust debate that surrounds Oracle's bid. Additionally, the success of an Oracle deal ultimately depends on its ability to retain PeopleSoft's customers.

Phillips said Oracle would maintain partnerships with PeopleSoft's consulting and technology partners, including database partners that compete with Oracle. According to PeopleSoft, 60 percent of PeopleSoft customers run their applications on Oracle databases, while the rest run largely on databases from Microsoft and IBM. The vast majority of J.D. Edwards customers run on IBM technology.

Supporting PeopleSoft applications on competing databases would not be an issue for Oracle, Phillips said. "The important thing to remember is that we are involved in multi-vendor support environments today."

"There is no partnership we are trying to close down," he added.

Phillips said Oracle would honor existing PeopleSoft customer contracts and support PeopleSoft installation projects still in progress. He also said Oracle does not plan on triggering money-back guarantees that PeopleSoft began offering after Oracle launched its buyout bid last month.

Questioned about Oracle's plans to further develop PeopleSoft technology, Phillips said Oracle would continue to update the software to comply with changing business regulations and requirements. "The product will continue to grow," he said.

Oracle has set up a PeopleSoft customer hotline (800-633-0925) to answer further questions about its plans for PeopleSoft products and services. CNET News.com called the hotline shortly after the town hall meeting and was directed to voice mail after waiting on hold for several minutes. An Oracle representative didn't know how many people are staffing the hotline.

About 700 callers, excluding Oracle employees, dialed into the town hall teleconference, the representative said.