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Oracle Sets New Staff, Direction for PeopleSoft

Following the completion of its PeopleSoft acquisition, Oracle replaced some managers, but it hasn't been as ruthless as it indicated it would be during the 18-month takeover battle, when it said as many as 6,000 PeopleSoft employees could be laid off. Oracle CEO Larry Ellison says the deal is now "friendly" and that Oracle will retain some PeopleSoft salespeople as well as engineers.

Friendly or not, the merger will force a number of PeopleSoft customers to re-evaluate their ERP platform. PeopleSoft software is costly to implement, often requiring long-term professional services from consulting firms like IBM Global Services and EDS. So now is the time for PeopleSoft customers to consider a change.

First, however, they'll have to consider compatibility issues. PeopleSoft's tight relationship with IBM could throw a kink into Oracle's integration efforts, because PeopleSoft now embeds IBM's WebSphere as its application server. Oracle has its own application server, so it remains to be seen whether the company will support a rival or migrate PeopleSoft to an Oracle platform.

Also at odds are Oracle's database business and PeopleSoft's support of non-Oracle databases. Oracle makes no secret that its relational database management system is its golden apple. There is a danger that Oracle will attempt to improve its database market position by phasing out support of non-Oracle database back ends for PeopleSoft.

The deal could also have a domino effect in the ERP market. It's likely that IBM will make a move toward some sort of deal with a competing enterprise application vendor--possibly Siebel--and use its brand recognition to lure PeopleSoft customers away from Oracle.

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