IBM i Shops Running Oracle JDE Consider MSPs And Migration

May 18, 2015 Dan Burger

GSI is an application and technology consulting company specializing in helping companies that run JD Edwards ERP software. As IBM i history buffs know, JD Edwards software solely ran on IBM midrange systems back in the day. An estimated 25 percent run on IBM i today, which still means hundreds of i shops find themselves caught between a rock (IBM) and a hard place (Oracle). And let’s say GSI is a company trying to ease the pain.

When GSI began its JD Edwards support business in 2004, 90 percent of its customers ran IBM AS/400s (later the iSeries, System i, and IBM i). Its CEO, Kevin Herrig, says the company was the only JDE support group at that time that understood a platform with a built-in database ran differently than a platform with a database that ran on an OS. “If you asked me back then what platform to run a business on,” Herrig said, “I would have said IBM AS/400. It was better than everything else out there.”

Approximately a third of GSI customers are currently running on IBM i and Herrig is happy to be in business partner relationships with both Oracle and IBM. Based on the number of IBM i migrations Herrig’s company has been involved with, it would seem Oracle is happier with GSI as a business partner than IBM is.

Kevin Herrig–CEO GSI

Herrig downplays any clash of IT titans in this business triad. Instead, when the topic of migrations arises, he finds that the number one reason JDE customers migrate from IBM i is workforce related. There is some consideration of system costs and maintenance charges, but workforce considerations are what most shops are concerned about.

It’s related to the age of the people who are associated with the IBM i, a lack of workers with modern IBM i skills, and the higher wages for those with modern IBM i skills compared to easy-to-find skilled workers in other environments.

“Very few people are coming out of school knowing IBM i,” Herrig notes. “There are also very few people coming out of school knowing JD Edwards. We have to train the next generation.”

Training the next generation for jobs with JD Edwards-based companies makes more sense to Herrig than training them for JDE and IBM i.

“There was a time when programmers were paid a lot of money. Microsoft certified professionals and IBM midrange professionals were paid top dollar,” Herrig says. “Now the workforce is a commodity. The kids have skills and smarts, but they are having a tough time finding jobs, so they’ll work for less.”

Cloud computing is also a factor. Herrig is convinced of that after being in the hosted services business for many years. Like many people, however, he is uncomfortable with the term cloud because so many people think of it in so many ways. Herrig prefers to call GSI’s JDE option “cloud-like.”

“You can’t ever really cloud JD Edwards,” he says. “It’s not built like Salesforce.com where one patch fits all. Everybody runs JDE in a completely different way. What we do is cloud-like, but every customer has their own installation.”

Highly customized JDE ERP is the rule. It’s practically guaranteed. And that makes those installations difficult to migrate to the cloud or to other platforms. For IBM i shops, concerns that one day the forced migration will come are always looming.

Oracle does what it can to convert World ERP users to EnterpriseOne ERP, the software that sucks up most of Oracle’s investments on a platform that has any relevance at all to IBM i. (Oracle has other suites that will not run on IBM i.) While IBM i shops can run EnterpriseOne, in Herrig’s view those that add the complexity of dealing with two companies when dealing with just one would simplify things. Primarily this comes down to choosing IBM WebSphere middleware, which Oracle does not support. This is where the rock and hard place analogy comes in. And as this drama plays out, it seems Oracle is winning more business from IBM i than IBM is retaining.

The number of World customers has dropped to approximately 300, according to Herrig, who also estimates the total number of JDE customers to be in the 4,000 range.

“I can’t tell you what the longevity of World will be,” he says. “It’s been one heck of a product, but from a software lifecycle perspective, it’s old. And you have companies migrating from IBM midrange platforms because of skill set issues.”

Herrig contends that when JDE users talk with GSI about hosting their ERP software, they don’t care what the platform is. They want to focus on their business and not on their business system. That, he says, is where the discussion begins.

“GSI is a managed service provider for clients who want them to manage their infrastructure on premise. There are a good amount of those on IBM i, including those that run JDE World on older systems. Some are just tired of managing and supporting the whole thing, including the infrastructure. They decide they will repurpose their people and they hire GSI,” Herrig says.

Repurposing people is often interpreted as shedding payroll, but Herrig claims it is a decision not to hire more people to handle the ERP side and take existing employees who know the business and apply them to growing the business instead of maintaining business systems. By outsourcing IT to GSI, a company gets people who are vacation-proof, illness-proof, and resignation-proof that are 24x7x365, as Herrig explains it.

The shift to cloud is in its infancy, Herrig says, but it is growing. Conversations almost always have some piece of cloud in the discussions.

“Two years ago it was one-eighth of our business discussions. Last year it was a third. By the end of this year it will be close to a half,” he says.

To set up its cloud-like environment, GSI partnered with Secure-24, a company with data centers in Michigan and Nevada. Secure-24 is an Oracle Platinum Partner managing Oracle E-Business Suite, JD Edwards, PeopleSoft, and Hyperion applications across multiple industries. Secure-24 is also an SAP business partner.

GSI and Secure-24 collaborated to build what they call JDE Cloud 9, an application and cloud infrastructure combination that scales to accommodate fluctuating or growing business needs. One of its aims is to be a single hardware and software vendor by utilizing Oracle RedStack. The service allows customers to maintain their current licensing agreements with Oracle.

JDE Cloud 9 is an indicator of the roadmap GSI is following. Like any smart business, GSI is following the money.

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