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PeopleSoft technology could boost Oracle's ailing apps biz

Oracle Corp. executives have said their company's bid for PeopleSoft will give them the customer base they need to improve sales, but some say PeopleSoft will boost Oracle apps.

Oracle Corp.'s desire to snatch up rival PeopleSoft Inc. could give Oracle application users the attention they have been craving.

There are some application modules that both companies have that do the exact same thing, so it doesn't seem to make sense to keep supporting all of them.
Chris Selland,
vice president of sell side researchAberdeen Group

Facing poor sales and criticism by some users as being too complex and too expensive to support, Oracle's E-Business Suite could improve from a successful takeover, according to analysts. The battle to acquire PeopleSoft is forcing executives to focus less on the company's database technology and more on its application suite.

Oracle executives have said their company's hostile bid of PeopleSoft is only about going after a badly needed customer base to improve sales. But PeopleSoft's solid HR software and core customer relationship management features have been called among the best in the business, analysts said, a label synonymous with Oracle's database products, but not of its apps.

Oracle's own enterprise resource planning applications have long held a backseat in the marketplace. The company's database software has been strong in the database market, and acquiring PeopleSoft could give Oracle the boost it needs to offer a complete technology package against archrival Microsoft Corp., which sells well-rounded database and application packages, said Chris Selland, vice president of sell side research at Boston-based research firm Aberdeen Group.

Oracle's applications business has been threatened by competition from SAP and the PeopleSoft. If successful, the acquisition could also bolster Oracle's application suite and data management tools, enabling it to better compete with SAP, Selland said.

But don't expect a complete overhaul of Oracle's apps, according to Selland. Companies that produce lengthy integration plans to their customers end up complicating the process and frustrating customers.

Oracle and PeopleSoft clearly have a lot of overlap, he said.

"There are some application modules that both companies have that do the exact same thing, so it doesn't seem to make sense to keep supporting all of them," Selland added. "Oracle will likely try to resolve any integration as quickly and painlessly as possible."

For More Information:

Users speak out about Oracle's ailing apps

Oracle-PeopleSoft saga

Others agree that Oracle will refocus its efforts around its application suite, an effort long awaited by application suite customers. There are some customers, however, who said Oracle has been focused on rolling out new technology without testing whether it is practical.

"After well over 10 years of trying, Oracle has had plenty of time to ensure that the core application functionality not only works, but can actually be effectively used by its intended users, said Darrell Blundell, who owns a ERP consultancy in Gilmer, Texas. "Unfortunately, Oracle's strategy to me and many other consultants appears to be to continue to roll out tons of new functionality to dazzle the marketplace."

While frustrated users grumble over the complexity of Oracle applications, Oracle is looking for ways address the complexity issues, said Joshua Greenbaum, principal consultant at Berkeley, Calif.-based Enterprise Applications Consulting.

"They're not looking for the PeopleSoft product line to enhance what Oracle already has," Greenbaum said. "The goal is to migrate these customers to Oracle and the better way to do that is to offer specific functionality that benefits these customers without trying to do this long and painful integration."

Let us know what you think about the story; e-mail: Rob Westervelt, News Writer

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