ERP Vendors Target PeopleSoft, JDE Bases
by Timothy Prickett Morgan
It never takes long for the competitive replacement deals to come out when one application software vendor acquires another. Last week, Lawson Software and SAP geared up to take a run at the PeopleSoft installed bases, each with a slightly different focus. Microsoft launched a competitive replacement program a week earlier. And it won't be long before dozens of ERP software makers, particularly those with iSeries experience, will begin attacking the PeopleSoft and J.D Edwards installed bases.
In fact, it seems likely that SSA Global, Intentia International, and International Business Systems will soon start circling the JDE base, hoping a feeding frenzy ensues. JDE has long been dependent on its thousands of RPG-based World ERP software customers for its services and support revenue stream, but it often focused on promoting and selling the Windows- and Unix-based versions of its OneWorld suite (which is also available on the OS/400 platform in native RPG). There are plenty of World customers who never wanted to move to OneWorld, and that did not change during the PeopleSoft acquisition of JDE, and it won't change now that Oracle has acquired PeopleSoft. Many of these customers will stay put and seek third-party support for their World and OneWorld suite while they ponder the possibilities of other ERP suites and the best time for them to move--if ever.
Still some customers do not want to be Oracle customers, just like some did not want to be PeopleSoft customers. And that is what Oracle's ERP competitors are counting on to boost their own sales a bit. While competitive replacement programs always sound like there is a vast opportunity, only a small portion of any installed base that has invested heavily in any technology has the gumption and cash to move to a new technology. This applies to ERP suites as much to servers and operating systems, stereos, and telephones. But the marketing and sales people at ERP makers have to take a run at an opportunity; this is what they get paid to do, after all.
As we reported in our sister publication, The Windows Observer, two weeks ago, Microsoft was the first ERP vendor out the door with a formal offer to customers using the PeopleSoft Enterprise, EnterpriseOne (formerly JDE OneWorld), and World (also from JDE) ERP suites. Microsoft's migration program offers PeopleSoft customers discounts of 25 percent off the initial software license fee for their new Microsoft Business Solutions ERP system, as well as a 25 percent off their first year's software maintenance. Customers have to get a license to one of Microsoft's four ERP suites, which include Great Plains, Axapta, Navision, and Solomon. Microsoft says that PeopleSoft Enterprise customers in the United States and Canada should consider the Great Plains ERP suite, while its Axapta suite is the best fit for users of World and EnterpriseOne applications. Customers who want the Navision and Solomon ERP suites can choose these and get the discounts as well, but the fact that Microsoft isn't recommending them to former PeopleSoft or JDE shops speaks volumes about how this is probably not a very good idea.
A week after the Microsoft announcement, Lawson, which cut its teeth developing what was simply accounting and MRP software for the IBM System/38 back in the late 1970s, announced that it would also be giving financial incentives to customers using OS/400-based PeopleSoft applications if they make the jump to Lawson's ERP suite. Lawson also reiterated that it has a current ERP suite available on the iSeries line--Lawson Accounting Suite 8.03--and that its current release on Windows and Unix machines--which is at the 8.1 release level--would be available later this year on the iSeries as well.
While Microsoft took aim at both the PeopleSoft base (Enterprise) and the JDE bases (EnterpriseOne and World), Lawson is, for now at least, more focused and is just attacking those applications that run on OS/400 platforms--namely, the JDE suites.
Terry Plath, the market development director at Lawson responsible for the PeopleSoft competitive replacement program, says that there are probably about 3,000 World and 3,600 EnterpriseOne/OneWorld customers, and that Lawson's focus is really even tighter than going after the entire base of customers. In fact, Lawson has identified the 1,000 former JDE customers in the services and healthcare markets, where Lawson has concentrated and had much success in the past several years, and it is these customers that Lawson will pursue first. Plath says that World customers were treated differently at JDE and PeopleSoft, and that is where Lawson will hit the hardest.
Lawson has partnered with CIBER, a 30-year-old IT services and integration company with expertise in JDE suites, to provide support services to JDE shops that want to migrate in the future to Lawson's ERP suite (either the 8.03 release or the future 8.1 release) but do not want to give Oracle any support money. CIBER, which is based in Denver, like the former JDE, is offering support on the EnterpriseOne and World suites at up to half off the price that PeopleSoft (and now Oracle) were charging. Lawson will then cut as much as 50 percent off the cost of its ERP suite, and will use CIBER's data migration tools to move DB2/400 databases from the OneWorld and World formats over to the Lawson formats. Lawson is also partnering with IBM Global Financing to offer extended leases of five to seven years to cushion the economic blow of doing an ERP conversion. Lawson 8.03 is supported on all OS/400 V5 releases, and Lawson 8.1 will be, too. Lawson figures it will take anywhere from three to six months to close a competitive deal, and that migrations should take less than 12 months.
Just after Oracle announced in late December that it had acquired PeopleSoft, TomorrowNow, a service provider based in Bryan, Texas, founded in 1998 by former JDE employees to offer third-party support for the OneWorld and World suites, that also supports PeopleSoft's enterprise suites, announced that it would offer support to customers using these three ERP suites at half the price that PeopleSoft was charging. The offer was just too good for SAP to pass up, and last week it snapped up TomorrowNow so it could take a run at the vast installed based of JDE software within its own SAP R/3 and mySAP ERP customer bases. Financial terms of the acquisition were not disclosed. (To learn more about TomorrowNow, see "TomorrowNow Ramps Up New J.D. Edwards Support Practice.")
SAP reckons that about 2,000 of its own customers are using PeopleSoft and JDE suites, and the support offerings that TomorrowNow is providing can tide customers over as they contemplate and plan a migration to the mySAP suite, much as Lawson has hired CIBER to do. SAP is calling its offering "Safe Passage," which means SAP's TomorrowNow unit provides the support services for the PeopleSoft and JDE suites, while customers contemplate SAP's NetWeaver middleware and the move to mySAP. You have to license mySAP to get the maintenance on the PeopleSoft and JDE suites. SAP did not talk about any discounts for customers moving over to mySAP, but you can bet Oracle chairman and CEO Larry Ellison's last billion dollars that there will be some steep discounts for former PeopleSoft and JDE customers who opt to go SAP all the way. After business dries up at those 2,000 sites, you can also bet that SAP will turn its attention to the remaining 11,000 customers using PeopleSoft and JDE suites.