Oracle faces daunting challenges integrating PeopleSoft

IDG News Service - PeopleSoft Inc.'s acceptance of an Oracle Corp. takeover finally ends 18 months of uncertainty for both companies' customers (see story), but it opens new challenges for the victor. As Oracle embarks on one of the software industry's largest acquisitions in history, the company needs to prove it can chew what it has bitten off (see story).
"Oracle has to win us over," said PeopleSoft customer Andrew Albarelle, principal executive officer at Denver-based staffing company Remy Corp., which runs PeopleSoft's financial software suite. "I have not seen a clear message from them."
Albarelle said he had planned to wait until late December, the end of PeopleSoft's financial quarter, to license several additional modules. Now, he will hold off on that purchase and evaluate Remy's options for maintaining its enterprise resource planning system. Albarelle said he will consider building applications in-house as new functionality is needed and look at third-party maintenance providers.
Oracle has offered reassurances about its intention to support PeopleSoft customers, but it's an open question how well it will live up to expectations, said John Webster, the PeopleSoft programs director at Dakota State University's Center for Remote Enterprise System Hosting (CRESH).
"There's a whole lot of uncertainty out there," Webster said. "Will they hold true to their word? Prior to the sale, [promising support] is a marketing tool. Now, it's an expense."
Webster's program, which trains students to support PeopleSoft deployments at other educational institutions, is in the process of starting up a commercial PeopleSoft services firm, CRESH Inc. Over the past few months, Webster has received queries from PeopleSoft customers exploring their options for outside maintenance of their applications. Webster sees the Oracle acquisition changing, but not destroying, CRESH's business.

"We can look for new opportunities," he said. "The customers still believe in the software."
Meta Group Inc. software research director David Yockelson doesn't expect any immediate changes for PeopleSoft customers, but he said the deal will reshape the direction of the software industry. Oracle says buying PeopleSoft will help it compete with enterprise applications leader SAP AG, but according to Yockelson, the company's ability to expand its infrastructure market share is more compelling.
"This was never about the applications assets," he said. "Owning the applications does not immediately launch Oracle to the level of a competitor with SAP."
What it does is give Oracle the chance to sell its database, application server and other infrastructure software to PeopleSoft's customer base. The company's software would run beneath PeopleSoft's applications. Oracle already owns a chunk of that market, but