Oracle's 'Project Fusion' Aims To Retain Customers

Having gobbled up JD Edwards and PeopleSoft, Oracle (Nasdaq: ORCL) yesterday held a coming out party for "Project Fusion," its plan to meld the products of the three companies and hold onto the customer base for which it paid US$10.5 billion.

"The big news is that Oracle is not forcing customers to migrate," Evan Quinn, vice president of enterprise application research at IDC, told CRM Buyer. "That to me was the major announcement. Everybody presumed there would be a 'nudged' migration path to Oracle E-Business Suite."

Java-Based Suite

Instead, Oracle announced that around 2008 it would release "Project Fusion," an integration of PeopleSoft and JD Edwards enterprise applications into its product suite. The suite will be built on standards-based Java platform, an announcement Quinn found less than startling.

"Oracle made large commitment to Java several years ago," he said. "I don't consider this to be a revolution -- more a formalization of the path they were already on."

The lack of details in Oracle's announcements could leave an opening for other vendors.

"In the short term, I would expect that enterprises that are starting vendor evaluations will be quite confused in terms of which of the Oracle/PeopleSoft/JD Edwards solutions will meet their needs," Jason Corsello, senior analyst at Yankee Group, told CRM Buyer.

Door's Open for Migration

That's exactly what Oracle is trying to prevent, since confusion may lead to dissatisfied and disloyal customers.

"This is a switching opportunity for vendors such as SAP," Quinn said. "What this is all about is Oracle trying to protect its newly bought customers."

He added, "Other vendors are going to attack that customer base. There's a reasonably sized minority of PeopleSoft and JD Edwards customers who may not be looking forward to being Oracle customers."

Quinn said he believes that window of opportunity will remain open for about a year. He also noted that migrating enterprise applications suites is no simple task.

"A year from now, if Oracle did a good job of protecting its customer base, it will have aggrandized its place in the market," Quinn said. "We'll see a lot of very aggressive gamesmanship in 2005. This is the year to make it happen. This year will have definite impact [in the market] for years to come."

Product Road Map

But Oracle still has a lot of practical work to do before that year is up.

"The challenge or question that remains is how Oracle will integrate the multiple product lines from Oracle, PeopleSoft and JD Edwards together in the future," Corsello said. "For example, both PeopleSoft and Oracle have recruiting modules in their HCM suite/solution. The question remain[ing] is which one of those products will survive and/or how they will converge overlapping product lines?"

Oracle will continue to support PeopleSoft products. It said it would release PeopleSoft Enterprise 8.9 this year. In 2006, it will release Oracle E-Business Suite Version 12, PeopleSoft Enterprise 9 and EnterpriseOne 8.12.

Also yesterday, Oracle followed through on its promise to release quarterly security patches, with its first Critical Patch Update. The release includes security updates for nearly two dozen holes, including flaws in Oracle Database Server, Application Server and Collaboration Server.