netCustomer Tempts J.D. Edwards Shops with Third-Party Support

Published: March 14, 2006

by Alex Woodie

J.D. Edwards World and EnterpriseOne users who are finding Oracle's 22 percent maintenance fee tough to swallow may find a more palatable pill in a new third-party support offering from netCustomer. The former PeopleSoft development and maintenance partner, which is based in India, is ramping up its new "cafeteria-style" support offering, which lets J.D. Edwards and PeopleSoft users pick from a menu of services.

netCustomer's story goes back to 2001, the year PeopleSoft signed a deal that transferred a significant portion of its technical support operations, as well as some development and customization work, offshore to netCustomer Indian facilities. At its peak, netCustomer had about 150 employees providing support to PeopleSoft Enterprise customers in the United States and other parts of the world.

When PeopleSoft acquired J.D. Edwards in 2003, netCustomer began working on the World and EnterpriseOne product suites as well. When Oracle acquired PeopleSoft in a $10.6 billion hostile takeover, netCustomer continued to provide support services for the PeopleSoft and J.D. Edwards applications, at Oracle's request, according to netCustomer CEO Punita Pandey. However, the relationship did not have the legs to continue, and by September, netCustomer and Oracle were no longer working together.

From there, it was an easy step to begin providing third-party support and maintenance services to J.D. Edwards and PeopleSoft customers, which the company announced last week. Like other third-party maintenance and support services providers, netCustomer says its customers can expect to save at least 50 percent of the cost they would provide to Oracle.

Pandey, who lives in San Jose, just a few minutes from Oracle's headquarters in Pleasanton, California, says netCustomer is seeing a lot of interest from J.D. Edwards shops that are unsure what their future holds with Oracle, specifically when it comes to supporting their investments in the iSeries and DB2/400. "They've traditionally been on an IBM platform, so they're less likely to move to a different database or hardware platform," she says. "There was a reason they chose J.D. Edwards. So we're trying to replicate the environment they have."

Oracle may not force J.D. Edwards to upgrade to its next-generation ERP product, called Fusion, or to migrate off DB2/400 to its own relational database (or it could-Oracle won't say). While it may not do these things, it may do little to justify its annual maintenance fees. "If you're an old World customer, but you pay 22 percent of your license fee, you're not planning to upgrade, you don't need a lot of fixes, and have only occasional support needs, you should be asking yourself 'What am I getting in return?'"

J.D. Edwards shops can choose from netCustomer's cafeteria-style menu of services, which are centered on front-line technical support, but also include maintenance services (regulatory and tax updates) and customization and development services. All languages are supported, including RPG. English is spoken on the phone.

Pandey also points to netCustomer's "on-demand" delivery method, which she says gives clients a more flexible delivery schedule than what they can get through Oracle. "If they have an issue, they can call and get support right then and there, rather than have a contract in place," she says. "It's on demand in the sense there are experts there all the time."

Another advantage that may work in netCustomer's favor is its recognition of contracts already in place. The company doesn't require J.D. Edwards or PeopleSoft users to sever their support contracts with Oracle before hiring netCustomer to do work, as some other third-party maintenance providers do, Pandey says.

netCustomer has an impressive board of directors staffed with former J.D. Edwards executives, including Idella Kercher, former vice president of customer advocacy; Jan Zapapas, former senior vice president of application development; Travis White, vice president of marketing for EMEA; and the "JDE power couple" of Gayle and Michael Sheppard. The latter is a former group vice president of Asia Pacific and Japan, and the former was vice president of worldwide sales.

Ram Gupta, the former head of development for PeopleSoft, has also worked with Pandey and netCustomer. While with PeopleSoft, Gupta was instrumental in putting together the offshore strategy that brought netCustomer into the PeopleSoft fold.

netCustomer is currently ramping up its Indian facilities for future growth. Following the separation from Oracle, a number of the company's "support analysts" left, which caused some concern, Pandey says. However, the core group of people who put the delivery model into place are still with the company. "The plans this year are to really scale it up, and do things we didn't do before," Pandey says.

For example, the company has been ramping up its support for the World ERP suite, including hiring many former World programmers and administrators from the constantly churning Indian IT workforce. "We're finding it easier to find World customers than EnterpriseOne. We're able to get folks from the end-user companies," she says.

In addition to PeopleSoft and J.D. Edwards products, netCustomer also supports CRM software developed by Siebel Systems, which was acquired by Oracle last year. However, netCustomer could roll out support for other ERP products, including SAP's legacy products and the Baan ERP product from SSA Global. "Our goal is really to look at every possible ERP out there. The reason we support J.D. Edwards and PeopleSoft is because that user base is more confused more willing [to look at alternatives] because the future of upgrades is dicey for them," Pandey says.

netCustomer's offshore delivery model is banking on the company's ability to deliver services more efficiently than on-site people, and for less money than Oracle. The proof of this approach, Pandey admits, will be in the pudding. In the case of Oracle, that pudding doesn't have to win any awards--it just has to taste slightly better than Oracle's.

"Inherently the model is very appealing, and the time is right now," Pandey says. "Customers are willing [and] customers are fed up. If I'm a J.D. Edwards customer, I've got to seriously question why I am with Oracle."