Hard on the heels of Oracle Corp.'s statement on Tuesday that it expects to retain more than 95% of its newly acquired PeopleSoft and JD Edwards users, SAP America today fired a broadside at its chief competitor, offering a program to capture some of those users by taking over maintenance and service of PeopleSoft and JDE applications and even migrate their users to the SAP platform.
The program, called Safe Passage, offers companies running the former PeopleSoft and JDE applications a way to migrate to SAP software, including its NetWeaver platform, through the use of what SAP calls "connectors". Connectors are pieces of software that enable the movement of data between applications. To execute on its maintenance and service offering, SAP said it has acquired TomorrowNow, a Bryan, Texas, provider of third-party support services for PeopleSoft and JDE applications.
Safe Passage is initially designed for SAP customers also running either PeopleSoft or JDE applications. SAP said that analysts have estimated there are up to 4,000 companies with such mixed application environments, with 80% to 90% of those typically running SAP in financials or manufacturing and JDE in manufacturing and PeopleSoft in human resources. The program isn't being offered at this point for non-SAP customers using either the JDE or PeopleSoft applications nor is it in effect for mixed SAP/Oracle environments.
On Tuesday, Oracle said that it had completed the organizational integration of its $10 billion acquisition of PeopleSoft, which bought JD Edwards in 2003. The company said it is now focused on retaining PeopleSoft customers and developing a next generation, standards-based application suite, a combination of the Oracle and PeopleSoft product lines dubbed Project Fusion. Oracle said it would develop and support the PeopleSoft products until 2013 even as it undertook development efforts for Project Fusion, infrastructure elements of which it said would begin rolling out in 2006.
But SAP officials said Oracle's announcement has worsened a sense of uncertainty among PeopleSoft users that started when Oracle first undertook its hostile bid for the Pleasanton, CA, company 18-plus months ago. "Customers have expressed significant concerns about the acquisition," said Bill McDermott, president and CEO of SAP America, Inc., during a conference call with journalists and analysts. "Now, there's even more concern about future plans."
Added Shai Agassi, a member of SAP's executive board: "The competition has laid out an ambitious agenda. The 2013 goal is highly optimistic." Agassi criticized Oracle CEO Larry Ellison's claim that Project Fusion will be standards-based, saying support for non-Oracle data base environments and Microsoft platforms was not offered. "SAP has had a standards-based, integrated platform since 2003," Agassi said. "And SAP is delivering a platform that truly supports Java, ABAP (SAP's programming language) and .NET."
Oracle did not have a response to the SAP announcement by press time.
Under the Safe Passage program, SAP is offering companies using PeopleSoft or JDE applications a 75% license fee credit if they choose to move to SAP products and maintenance on the PeopleSoft or JDE products at 17% of the license price of those products. Here's how the program would work, according to Agassi: A company that purchased a PeopleSoft application in, let's say the year 2000, for $1 million would get a $750,000 credit and therefore pay $250,000 for a mySAP ERP license. Maintenance, meanwhile, would be calculated at 17% of the $1 million.
Safe Passage follows an earlier SAP initiative to lure JDE and PeopleSoft customers. The initial program, called Safe Harbor, was announced at the beginning of the Oracle/PeopleSoft takeover battle and involved a free SAP-provided assessment of a company's application environment and possible options. SAP spokesman Bill Wohl said he couldn't provide specific results of the Safe Harbor program, but he noted that SAP has increased its market share by 22 points in the last year, although not all of that gain can be attributed to the program.
Maintenance and support services on the PeopleSoft and JDE applications will be delivered through TomorrowNow, a company with about 100 customers, Wohl said. Terms of the TomorrowNow acquisition weren't disclosed.
SAP's initiative follows a similar move announced recently by Microsoft Corp. The software giant is offering PeopleSoft customers who migrate to one of its application suites a 25% discount off of license fees, and a one-year 25% reduction on annual support costs. Microsoft has suggested that PeopleSoft Enterprise customers evaluate its Great Plains applications and that EnterpriseOne and World customers consider migrating to its Axapta package.