TomorrowNow Ramps Up New J.D. Edwards Support Practice

by Alex Woodie

Former J.D. Edwards shops that are unhappy about Oracle's acquisition of PeopleSoft now have another option for basic technical support. TomorrowNow, which has provided third-party support for PeopleSoft's Enterprise product line since 1998, launched a new support practice this month for PeopleSoft's EnterpriseOne and World ERP product lines, in which it will provide bug fixes, tax and regulatory updates, and 24/7 support to customers.

"The J.D. Edwards customer base has felt a bit homeless since being acquired by PeopleSoft," says Seth Ravin, president of TomorrowNow, based in Bryant, Texas. "It's tough to be the acquired line, and not being integrated into the whole customer community."

In agreement with Ravin is his new colleague Nigel Pullan, a former senior executive at J.D. Edwards and the new vice president of TomorrowOne's World and EnterpriseOne Solutions practice. "The old J.D. Edwards customers felt they had their own family, their own organization. They had Quest, their own user community," Pullan says. "After the PeopleSoft acquisition, they felt they belonged to J.D. Edwards, not to PeopleSoft. Although PeopleSoft has made steps with the product, they feel they're still a J.D. Edwards customer."

Now that PeopleSoft, in turn, has been swallowed up by Oracle, things aren't looking much better than when J.D. Edwards was acquired, in the summer of 2003. While that acquisition had its rough stretches, things were coming along, and PeopleSoft at least was committed to enhancing both product lines. Oracle has said it will continue development of Enterprise and EnterpriseOne (or J.D. Edwards 5, one of several other names the C-based ERP system has gone by) and release a J.D. Edwards 6. However, it has made no announcement about its intentions for the World product line, raising the likelihood that the aging RPG-based ERP system will be put out to pasture and milked for maintenance.

Just the Maintenance

TomorrowNow doesn't have any plans to add new functionality to either EnterpriseOne or World. Its business is writing fixes and providing basic tech support--and doing so for half the cost charged by PeopleSoft. And TomorowNow's maintenance fees will likely be quite a bit cheaper than Oracle's, considering that Oracle is counting heavily on the maintenance revenue stream to recover the billions it's sinking into the deal.

The ideal TomorrowNow customer is a conservative World or EnterpriseOne shop that's happy with its current ERP setup and isn't interested in new functionality that would need to be tested thoroughly, Ravin says. "Out of every dollar of support fees, PeopleSoft was spending 70 cents on R&D," Ravin says. "When new releases come out, the customers get those. Call them 'free,' but the reality is, those customers may pay for those several times over."

Companies have dramatically changed the upgrade cycles for their back-office system, says Ravin, who used to work at PeopleSoft. "What we're seeing here is a paradigm shift from products being replaced every two years, to 10 years on a heavy back-end system," he says. "Customers are saying, 'I'm happy with what I'm doing today. I don't want a forced upgrade. I want to get my ROI out of what I have.'

"We're just responding to that, creating a new niche, providing fixes to any serious problems, tax and regulatory update, 24/7 support, and 30-minute response times," he says. "Were not giving you new functionality. It's a safety net for customers not comfortable with being out on their own." Third-party support programs aren't for everybody, Ravin acknowledges, and those who look forward to new functionality are much better off sticking with their vendor, he says.

Building a Practice

In early December, a week before PeopleSoft's board agreed to the Oracle acquisition, TomorrowNow announced its plan to begin providing basic maintenance services for the World and EnterpriseOne product lines starting in 2005.

Company officials say their decision to expand into the JDE product lines was validated by a recent survey of more than 150 PeopleSoft customers conducted by AMR Research. Results of the survey (which was heavily skewed toward the JDE customer base, with about 80 EnterpriseOne customers and about 60 World customers and around only a dozen Enterprise customers) indicate that 64 percent of PeopleSoft customers have low expectations for the fate of their product. What's more, 47 percent of them expect Oracle to offer no new functionality, while 17 percent expect minimal enhancements.

In the report (PDF format), AMR Research's Bill Swanton concluded, "A great majority of J.D. Edwards customers have low expectations of new enhancements and are willing to move to third-party support to save money."

One of the first JDE products TomorrowNow will support is the old OneWorld XE product, which PeopleSoft was due to stop supporting in February. The company has yet to decide what other versions of the two product lines it will support with its services, and has formed a steering committee to find out what customers are looking for.

As TomorrowNow has learned from supporting hundreds of different PeopleSoft Enterprise modules, supporting an ERP software system (let alone three very different ERP product families) is no easy task. "We're very focused on just providing the support services. We're not a general consulting house," he says. "It requires a huge amount of process and procedure to do this. The general consulting arms that think they can do this--it's just not going to happen."

TomorrowNow has credibility in the PeopleSoft Enterprise market and is currently supporting about 100 customers, a good portion of them Fortune 100 companies and at least one with hundreds of thousands of employees, Ravin says. But, as TomorrowNow has learned, the J.D. Edwards products are completely different animals, with their own culture and community. Hiring Pullan, who spent 11 years with J.D. Edwards as its senior vice president and general manager for operations in Europe, the Middle East, and Africa, is a good step in the right direction. TomorrowNow is also looking to add more senior-level support managers from other third-party service providers, as well as PeopleSoft. Considering that layoffs are inevitably in the cards for a combined PeopleSoft-Oracle, that shouldn't be a problem.

Depending on how things go in the J.D. Edwards world, TomorrowNow may roll out support services for other OS/400-based ERP products, officials say. The company is not necessarily interested in building a huge iSeries business, but if the pace of consolidation in the software market continues to accelerate, and more aging OS/400-based ERP applications get hung out to dry, third-party support could become the wave of the future a lot sooner than some expect.