The manager of enterprise systems at a large health insurance company that just merged with another finds himself in the in-flux group, and he's evaluating vendors as if they were show dogs. "We're setting up two panel discussions with [ERP] vendors so they can explain their plans," he says. "We've also got 20 other vendors related to enterprise software signed on for a fair so they can lay out their strategies going forward. Our focus has been on integrating instances [because of the merger]. I'm sure some CIOs are thinking longer-term, but our activity has been focused on this integration."

Quinn believes you can spend six months to a year planning your future or entertaining vendors. Then, it will be time to move to a transition strategy because even though Oracle gave you time, the company will still try to sell you on switching. It has to.

UNCLE ORACLE NEEDS YOU!

Oracle's promise to support PeopleSoft until 2013 was an easy one to make (who really knows what will be going on eight years from now), but if one divides the price paid for PeopleSoft by the number of PeopleSoft customers, Oracle spent about $US790,000 per customer, and the last thing it can afford is an exodus. Oracle bought customers, and every one it loses reduces the acquisition's ROI.

That's Oracle's dilemma. To retain PeopleSoft customers, it must do things in the short term that don't make much long-term business sense. No company wants to support overlapping product lines, ever, but Oracle has promised to do just that - for eight years. Software vendors are used to 18-month product cycles, and yet Oracle's Phillips says: "There's no rush. The products are viable, and we're not asking anyone to switch."

But as author Matthew Symonds notes in his book Softwar: An Intimate Portrait of Larry Ellison and Oracle, revenue from PeopleSoft licences will generate only $US800 million a year for Oracle - not nearly enough to justify a $US10 billion acquisition. It doesn't take a crystal ball to imagine that Oracle's sales force will soon convene (or has already) at some tropical resort to hone its pitch for Oracle as a one-stop shop, a place to get end-to-end software solutions. Eventually - much sooner than eight years from now - Oracle will ask customers to switch to Oracle enterprise applications and databases and services or it will raise maintenance prices. Or both.

Oracle spokeswoman Karen Tillman acknowledges much of this. "Obviously, the upsell to other Oracle products was part of the business logic behind doing the deal," she says. "But it doesn't mean," she adds, "that [customers] have to do it."

Step 2: WHAT TO DO NEXT

There are three basic "next steps" for PeopleSoft users.

Sit tight - You're most likely from the stable group, and you continue to be in an enviable position because waiting lets you keep all potential future ERP models available.

UMass's Gray calls his PeopleSoft implementation "fairly stable", and he adds: "Obviously we're at a juncture where we don't want to change it out." But he expects pressure to do just that. "My experience - and I don't think it's atypical - is that a CIO never feels in the catbird seat with Oracle," he says.

For Gray, sitting tight doesn't equal doing nothing. He's planning to meet with Oracle to find out what the company intends to do with what he considers PeopleSoft's superior code. He sent some staffers to a conference to discuss the future of Oracle's ERP innovation and pricing. And he's studying how reduced competition in marketplaces historically affects costs and responsiveness to customer needs. That's something he'd been thinking about before the takeover.

"You've got your organization stabilized, the business functions are going smoothly, there's really not a great gain to be had from continuous refinement," Gray says. "We've yet to see a clear vision of where [the vendors] are going to take us or how much they want to charge us."

In a sense, nothing changes for Gray or anyone who can sit tight. Gray just runs PeopleSoft and gets support from some of the same people, only they've switched business cards. The risk he runs is that his maintenance costs could rise. Gray also says the transition to Oracle was "a little bruising. Some support questions were not addressed in a timely manner, and there was a point where we didn't know who was representing us". He attributes that to the physics of merging organizations and says it has since stabilized, although he has quite a few unanswered questions.

Gray isn't hemmed in by his situation. He could stick with Oracle, or he could choose radical change in ERP models down the road - to, say, a services model - if that's what he decides is the best path.

"Obviously," Gray says, "there's a lot to talk about."