At press time, Oracle Corp.’s efforts to buy out PeopleSoft Corp., and the latter software vendor’s drive to consume J.D. Edwards & Co., were ongoing. Whether either of these deals will become a reality is unknown, and all possible angles that could be played out are still being surveyed. Will the U.S. government be forced to put its snout into the affairs of market-share-grasping IT firms again? At a time when IT people are just starting to forget about Microsoft’s saga in this department, such questions are looming large.
Whether the issue is resolved or not by the time this paper hits your desk, though, one thing is certain: for however long this software soap opera takes to play out, and for a good chunk of time afterwards, users of all three firms’ products will be left in varying degrees of limbo.
Consider the plight of a shop that has just purchased a spate of offerings from J.D. Edwards. There’s little doubt that many a meeting has been hastily convened within the walls of such companies since the news broke of PeopleSoft’s offer to buy JDE out.
And many a fingernail has certainly been whittled in those meetings as IT managers and enterprise beancounters wonder what the long-term prospects are for their recently-unwrapped purchases. How will support be affected? How about all that great stuff they heard from the J.D. Edwards sales guys surrounding future versions and smooth migration paths into the future?
Users have heard the reassuring rhetoric from the top brass of these vendors, but it’s doubtless doing little to assuage their fears. Big takeovers invariably mean big changes for the little guy. Just ask anyone who had a Bay Networks router a few years back.
The plight of PeopleSoft customers is no different than that of J.D. Edwards loyalists. Concerns about the lifecycle of their current applications and the spectre of more money being spent down the road on Oracle offerings are two potentially harsh realities that are keeping them up at night.
And the fretting isn’t limited to customers of the smaller fish in the enterprise software pond. Although it’s a less immediate problem, the prospect of a consolidated marketplace should also be a source of concern to SAP and Oracle users. A landscape with fewer vendors means fewer product choices, less innovation and higher prices. At least that’s what the Economics 101 textbooks say. And there’s a reason why those sections haven’t been rewritten for decades: because they’re invariably right.
The most unfortunate part of the whole scenario for users is that it has no tenable solution. As long as firms operate in a system where they can be bought and sold, such uncertainty around the viability of their products will always be an unsavoury fact of life for customers.
Such uncertainty makes it all the more understandable why product purchasers choose to buy from the bigger fish. Getting swallowed and digested just isn’t that much fun.
