Declaring the organizational integration of newly-acquired Peoplesoft Inc. "done", Oracle Corp. CEO Larry Ellison today said his focus has now shifted to retaining Peoplesoft customers and driving development of his company's next-generation application suite, a combination of the Oracle and Peoplesoft product lines dubbed Project Fusion.
Although Oracle co-President Safra Catz, in court testimony prior to the acquisition, said Peoplesoft customer retention could reach a low of 85 percent, Ellison today said he expects in excess of 95 percent of Peoplesoft customers to stay with Oracle. "Customers will stay with us as long as we deliver," he declared.
Ellison, in a wide-ranging presentation intended to launch the new, combined Oracle-Peoplesoft, said the company's post-combination organizational structure is now in place. And, he said, all layoff notices have gone out. Last week, Oracle announced post-acquisition plans to lay off 5,000 employees, bringing the company's total employee count to 50,000. The layoff figure was somewhat lower than the 6,000 worst-case scenario Oracle officials had earlier discussed.
"In terms of organization, we're done," said Ellison. "There are no more organization changes."
While acknowledging that it will take time to convince observers and some customers of the successful integration of the two companies, Ellison rejected the widely-held notion that merging the Oracle and Peoplesoft cultures will be difficult. The cultures of the two companies, Ellison claimed, are quite similar. "They both want to win, develop high-quality products and support customers," Ellison said, noting that up until recently Peoplesoft was run by Craig Conway, a former Oracle sales executive, and that other Oracle-trained executives have played prominent roles at Peoplesoft over the years.
"I have a hard time reconciling those facts with the notion that they [Peoplesoft] were warm and fuzzy and we were hard-edged and ruthless," Ellison said.
John Wookey, a 10-year Oracle applications veteran, will take over as senior vice president for applications development. He replaces Ron Wohl who had run Oracle's development teams. Oracle's support and on-demand hosted applications businesses will be run by Executive Vice President Juergen Rottler, who formerly presided over support and services at Hewlett-Packard Co.
The only top Peoplesoft executive with a key role in the new Oracle applications organization is Jesper Andersen, formerly senior vice president for product strategy at Peoplesoft. Andersen, a senior vice president in the new organization will run a combined product strategy team composed of strategists from Peoplesoft and Oracle.
Neither Ellison now Wookey said what roles -- if any -- other prominent Peoplesoft executives such as Carol Ptak, Less Wyatt or former CTO Rick Berquist would play in the new organization. Oracle officials did not respond to questions about their roles by press time.
While Oracle will merge the Peoplesoft and Oracle product strategy teams, Wookey said the company will retain separate product development and support teams for each of the key product lines: Oracle's e-Business Suite and Peoplesoft's Enterprise, EnterpriseOne and World product lines. An 11-year Oracle veteran, Joel Summers, was chosen to run the support organization for Peoplesoft applications, Wookey said. Another Oracle executive Cliff Godwin, was chosen to run the team developing the infrastructure for the company's Project Fusion next-generation applications.
Wookey also laid out a roadmap for Oracle's future applications product development. As the company stated soon after convincing a majority of Peoplesoft shareholders to accept the acquisition, Oracle reaffirmed it commitment to develop and support existing Oracle and Peoplesoft applications for 10 years. Oracle will also continue development of Peoplesoft Enterprise 8.9 release, expected later this year. A follow-on release, 9.0, is expected in about a year, Ellison said. Similarly, Oracle is now beginning development of a new release, version 12, of the E-Business Suite. It will be available this year or early next, Ellison said. And the company is completing development of version 8.11 of the JD Edwards applications suite acquired first by Peoplesoft and now owned by Oracle. A follow-on release, version 8.12, is planned, Oracle said.
At the same time, Wookey said, Oracle this year will make a "strategic introduction" of the Project Fusion next-generation architecture. In 2006, Oracle will continue to release new versions of the Oracle and Peoplesoft applications while beginning to roll out infrastructure elements of Project Fusion. Project Fusion application logic will begin to appear in 2007, and a full suite of the next-generation applications will be available in 2008, Wookey said.
Ellison said Project Fusion will combine the best functional pieces of the Oracle and Peoplesoft applications. It will also be built on standards such as Java, HTML and dynamic HTML and make use of a services-oriented architecture. Ellison noted that Project Fusion and SAP's NetWeaver set of SOA technologies have put Oracle and chief rival SAP on a collision course. As a company with roots in the database management business, claimed Ellison, Oracle will have an advantage in competing with SAP on the basis of IT infrastructure products such as application servers.
"Suddenly they've come to our turf," said Ellison. "If they want to have NetWeaver compete with our database and our application server, I can't wait for that game to begin. If [SAP's NetWeaver leader] Shai Agassi wants to change this into a technology war between us and SAP, that's a war we want to fight."