Oracle VS PeopleSoft
Adrienne Dutton
Danica Medina
Theresa Villano
Agenda
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Oracle vs. PeopleSoft: Big software
companies in action
The players: Oracle and PeopleSoft
Motivation: Why did Oracle want the
merger
A timeline
The fallout: IBM?
Lessons Learned
Applications
CRM
ERP
PeopleSoft
DSS
CRM
SAP
Databases
Backend
Oracle
IBM
BackGround Info.
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Enterprise resource planning systems (ERPs) are
management information systems (MISs) that
integrate and automate many of the business
practices associated with the operations or
production and distribution aspects of a company.
Before merger, PeopleSoft was a major provider of
ERP. SAP was their biggest competitor and had the
biggest market share.
Oracle initially only made databases, but eventually
expanded their market by providing ERP services.
History
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CEO, Larry Ellison, started Oracle 30 years ago in 1977
Ellison envisioned a working prototype for a relational
database model
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Changed business computing, as we know it
Started as only a database company then started getting
software and later added in ERP
In 2005, Oracle technology found in nearly every
industry around the world
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In 98 of the Fortune 100 companies’ offices
Oracle’s Business
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The world's largest enterprise software company
http://www.oracle.com/
Products:
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Main products provided by Oracle include the following:
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Database
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Applications
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(Consulting, Advanced Product Service, and Education)
Fusion Middleware
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such as Oracle ERP
Services
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2005 sales rose 15%; $1.1 of 11.98 Billion Dollars Total Sales
takes ERP & works together with all layers
The software products make money two ways:
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New software licenses
Ongoing license fees and product support
Assortment of Products: http://www.oracle.com/products/product_list.html
How we can RELATE?
Ex. Business Benefit
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Consumer Products
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Electronic Arts (EA) Runs the Sims Online
Game Faster
Using “Oracle Real Application Clusters” on
Linux
 Basically , used ERP
 Saved $3.4 Million
 Not just for databases but
service & game applications
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Full Case Study:http://www.oracle.com/customers/studies/roi/ea.pdf
History
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Founded 1987, former CEO Craig Conway
PeopleSoft users often bought Oracle’s Database as a backend product
2002 – Despite having a good product, they were not profitable
2003 – Acquired J.D. Edwards to expand market share
PeopleSoft’s Business
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ERP software
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An ERP provider:
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Innovative and flexible ERP
solution that runs on different hardware and
different database packages.
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The ERP program “talks to” different database
management systems (DBMS) to manage the data
(e.g. Oracle and IBM’s DB2).
Reference: http://www.peoplesoft.com/corp/en/public_index.jsp
Products
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PeopleSoft® family of products from HR to
Financials to Support:
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Campus Solutions
Customer Relationship Management Solutions
Enterprise Performance Management
Financial Management
Human Capital Management (eDevelopment)
Service Automation (IT & Billing)
Relationship Management
Supply Chain Management
Reference: http://www.oracle.com/applications/peoplesoft/all_ent_products.html
Why did Oracle want
PeopleSoft?
Customer Base
 Competition
 Vertical Integration
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PeopleSoft’s Customer Base
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The growth for new software licenses is beginning to
slow.
Companies such as Oracle are increasingly relying on
maintenance fees from current customers.
These fees produce profit margins between 80-
90%.
Before the Merger, PeopleSoft had 5,100 current
customers that are paying maintenance fees and
upgrade fees.
Oracle can spread their development costs over a
larger set of customers
Losing Customers?
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However, because of the merger, Oracle risks
losing some of PeopleSoft’s clients.
As a result, they have announced to develop
and improve PeopleSoft’s products for at least
ten years.
However, the long term strategy is to get
PeopleSoft customers to switch over to Oracle
products.
Oracle will offer free application software
licenses in replace for the PeopleSoft licenses.
Competition
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SAP was the dominant player in ERP, but the
merger brought three smaller companies
together (J.D. Edwards, PeopleSoft, and
Oracle)
Oracle’s competitive advantage has been
improved because their market share in ERP
has surpassed SAP’s market share.
Oracle will now have the scale it needs to
compete on a global basis against
competitors.
Applications
CRM
CRMDSS
ERP
Merger Creates:
VERTICAL INTEGRATION
Databases
Backend
Vertical Integration
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The merger will create vertical integration for Oracle.
Oracle can now offer customers “packages” that
include applications in addition to databases.
Customers no longer have to buy things from
separate companies, but can buy a complete package
from Oracle.
PeopleSoft applications also run on IBM’s DB2 so
perhaps by buying PeopleSoft, Oracle could get more
ERP customers to use Oracle’s database product
Merger Timeline
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June, 2003
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The merger between PeopleSoft and J.D. Edwards creates a business software giant.
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Days after PeopleSoft's J.D. Edwards purchase, Oracle offers to buy PeopleSoft for $5.1
billion.
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The Department of Justice wants more information from Oracle about its PeopleSoft
intentions.
February, 2004
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March, 2004
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The mid-tier market becomes a concern for U.S. District Court Judge
September, 2004
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Department of Justice files antitrust lawsuit to block Oracle's PeopleSoft bid.
Judge declares Oracle free to buy PeopleSoft in blow to Deptartment of Justice.
December, 2004
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PeopleSoft's board agree to sell the farm for $10.3 billion.
Strategies Oracle used to
keep PeopleSoft users
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Oracle admits its first challenge is to hold onto PeopleSoft
customers and their maintenance contracts
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“One thing will remain constant - our unrelenting support
of your business”
“Project Fusion” – the company’s next-generation informationoriented application architecture that combines Oracle,
PeopleSoft, and J.D. Edwards under a standards-based Java base
Oracle’s Fusion 1.0 is middleware. It will try to handle requests
from “all” ERP systems (J.D. Edwards, Oracle, and PeopleSoft)
and process them so that they can talk to a single database
structure. This is one way to help users eventually transition to
Oracle database and Oracle ERP.
Applications
CRM
ERP
DSS
CRM
Middleware: Fusion 1.0
Databases
Backend
How IBM’s DB2 was affected
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PeopleSoft runs on IBM’s DB2, as well Oracle’s database
product, IBM was likely to suggest PeopleSoft as an ERP
to its consulting customers.
Now that Oracle owns Peoplesoft, there is less chance
that customers will use it’s database product.
Oracle reassures IBM DB2 and IBM mainframe
customers that it will continue to support IBM platforms
To remain competitive, IBM is now improving how DB2
interacts with SAP and working hard to support SAP
Outcome and current status
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The combined company is now the second largest
purveyor of enterprise resource planning software
The ‘new’ Oracle is aligning itself to compete against
SAP, IBM, and Microsoft
Oracle is interested in acquiring more companies and
in other markets, including technology infrastructure
maker BEA Systems.
What We Learned:
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Maintenance fees are where software companies
make their profit, so market share is very important
Future upgrades: When investing in new software
packages you have to consider how future upgrades
will be managed
Vertical Integration: When deciding on a vendor
you not only have to worry about competing
products, you also have to be concerned with
companies who might enter the market through
vertical integration
Middleware (Fusion 1.0) is way to integrate
different products.
References
 http://www.oracle.com/
 http://www.peoplesoft.com/corp/en/public_index
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http://www.sap.com/company/press/press.epx?PressID=4517
http://www.networkcomputing.com/showitem.jhtml?docid=1603buzz3
http://www.internetnews.com/bus-news/article.php/3448551
http://www.internetnews.com/ent-news/article.php/2218131
http://news.com.com/2100-1012-5148596.html?tag%3Dnl