Oracle: PeopleSoft still going gangbusters

Oracle claims to have gained 350 new customers for the ERP suite in the past year, even as Fusion looms

Oracle has added more than 350 PeopleSoft customers in the past year, even as it prepares to launch the next-generation Fusion Applications, the company announced Thursday.

The current 9.1 release of PeopleSoft is also being adopted at a rate four times faster than any other edition, with some 1,000 customers either live or in the process of implementing it, according to the company.

New 9.1 customers include the Carlyle Group, BJC HealthCare and Navigant Consulting, Oracle said.

"For a product of this age, that's pretty remarkable that they're able to add that many customers in at this point," said Forrester Research analyst Paul Hamerman. The "substantive improvements" in 9.1 are one reason, he said. "Architecturally, it's still an old product but they keep moving it ahead."

However, there are some caveats to consider, he added.

While there are clearly still deals for Oracle to make with PeopleSoft, it's also losing some customers to attrition, he said. "So I think the customer base is holding steady but not growing. Some customers might drop off maintenance but keep running it."

Second, "if you're a multinational business, you still don't have that many choices [for ERP]. You have about three choices and two of them are from Oracle."

Oracle disclosed the statistics as part of an announcement for a PeopleSoft 9.1 feature pack that adds a variety of human resources capabilities.

"Existing customers will need to see incremental functionality in order to feel that their maintenance dollars are wisely invested," Constellation Research CEO Ray Wang said via e-mail. "Feature packs allow Oracle to show its still delivering incremental improvements without having to deliver full point releases."

The feature pack notion is reflective of rival SAP's own "enhancement pack" strategy for its Business Suite.

It also represents another tacit acknowledgement by Oracle that its installed base is not expected to leap wholeheartedly to the long-awaited Fusion Applications, which are set for an initial release sometime this quarter.

Oracle has stressed repeatedly that customers can adopt Fusion Applications at their own pace, and in a highly modular fashion. It has also pledged to continue supporting and developing its existing ERP (enterprise resource planning) product lines for some time even after Fusion Applications arrive, under the Applications Unlimited program.

The strategy doesn't necessarily mean Oracle sacrifices anything, since it would still continue to collect lucrative annual maintenance fees from customers that stick with their legacy applications.

In addition, Fusion Applications still haven't arrived and it will be years before they can provide equivalent functionality, Hamerman said. "Fusion is not there yet, so these companies need to move forward on software projects."

Fusion Applications may well be delayed again, he added.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com

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