UNCLE ORACLE WANTS YOU!

The enterprise application world is now bilateral. By adding PeopleSoft, Oracle's customer base is now within hailing distance of SAP's (see "The ERP Customer Share Pie", page 67). That was the whole point of the acquisition. Oracle is now Pepsi to SAP's Coke. And since many customers use both platforms - just as many consumers drink both soft drinks - the Big Two will now exert themselves trying to convince you that one is "the real thing" or, conversely, that the other is "the cola".

The back and forth has already started. SAP recently purchased TomorrowNow, a PeopleSoft support company, and is offering a complex set of "support-then-eventually-upgrade-to-SAP" options to lure PeopleSoft users away from Oracle. Oracle returned the serve by promising to support PeopleSoft "longer than most spouses commit" to each other, as Oracle president Charles Phillips put it. Oracle promised to retain 90 percent of PeopleSoft's technical staff, to upgrade the PeopleSoft software to version 9 and then support the PeopleSoft platform until 2013. "We can't spend $US10 billion and then let customers go away," says Phillips. "We are very motivated to keep the customers happy. When was the last time you heard Oracle talk about customer satisfaction so much?"

Or, as one analyst shrewdly suggests, PeopleSoft customers are getting the kind of access to Oracle that Oracle customers might envy.

What's more, Oracle and SAP aren't the only ones courting the PeopleSoft and JD Edwards CIOs. Independent support companies have popped up eager to take CIOs away from the big vendors and those big maintenance contracts. Second-tier enterprise application vendors - Microsoft, Lawson and others - have also put the hard press on CIOs. Microsoft just partnered with a company that does Web-based higher education enterprise applications, a move clearly aimed at poaching CIOs from the education market traditionally dominated by PeopleSoft. Outsourcing and services vendors have also come calling, cheerfully suggesting that, really, could there be a better time to turn over commodity business processes to a services company?

"I'm surrounded by people who want my money," says Bill Means, CIO of Decorative Concepts, which runs on JD Edwards. "They're calling left and right. I got three calls today."

Oracle's pledge to support the PeopleSoft platform has given CIOs the gift of time to plan for what comes next.

Step 1: FIGURE OUT WHERE YOU'RE AT

What's next for you will be dictated by where your enterprise platforms stood when Oracle bought PeopleSoft. At that moment, you were in one of two states: You were stable, or you were in flux.

If you were stable, you were happy with your enterprise systems and didn't anticipate major changes in your business.

So the first thing you do is look inward.

Begin a risk-based assessment of your enterprise platform and where you want it to be one, three and five years from now. Think about how much you want to pay, what level of innovation you want, whether you plan to have a single or multiple instances of ERP or if you want it in-house at all. (You were doing this anyway, right?)

Now you have the luxury of time. "That's the beauty of the current situation for people who already have PeopleSoft and it's working," says Evan Quinn, analyst at IDC (US). "They get to press the reset button and plan a long-term strategy, and everyone's going to offer them discounts."

David Gray, CIO of the University of Massachusetts System, is in the stable group. He says his PeopleSoft implementation is a "facilities-like investment that should last 20 years. There's substantial curiosity on long-term development, though. Many pieces of PeopleSoft's application set are markedly superior to anything Oracle has brought to market. We would hope Oracle would leverage that. We're scheduling a meeting [with Oracle] about this. We won't ask for excruciating detail yet, but I'll need more than I have now."

If you were in flux, you were planning to consolidate, upgrade or add to your enterprise applications and probably anticipated a major change in your business.

So you look outward.

Entertain the vendors. Play them off against each other. "Let's say you've been through a series of mergers, and you just got budget for a consolidation program," Quinn says. "You have eight financial systems, four PeopleSoft, one SAP, one Oracle, a Lawson and a Microsoft. Well, here's your chance to hold their feet to the fire. This is the time to be a little extra demanding. Every contract is an opportunity."

Basically, you're starting where the stable folks will be going next, demanding the best possible deal from all these suitors. But you have to think more about your immediate problems.