The greatest impact of the Oracle/PeopleSoft merger may be its effect on other software companies -- not customers, analysts say.
Large and small software providers must now learn how to best deal
with an Enterprise Resource Planning (ERP) world dominated by market
leader SAP and the marriage of Oracle and
PeopleSoft.
SAP, Microsoft and IBM activated contingency plans even before the U.S. Department of Justice's
antitrust case was decided.
Smaller players like Lawson, Fidelity Employer Services Company
(FESCo), Accenture and EDS have also
announced efforts to work with larger players and/or provide specialized
services for the human Resources and financial services sectors.
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as probable
targets.
"I would expect to see IBM go into the apps game with a Siebel
acquisition or BEA," he said. "I just don't think BEA can now stand up
to Oracle if it acquires PeopleSoft. With IBM and BEA, they could focus
on the integration space and middleware."
The highest priority process area, according to fellow Yankee Group
analyst Mike Dominy, will be a new breed of supply-chain management
called "network supply management."
"The overall market for technologies used inside the enterprise is
mature," Dominy said. "With few exceptions, the opportunity to sell
technology used solely within the four walls of a company has passed.
Naturally, there will be exceptions by industry, such as health care and
public sector, and sporadic technology spending driven by regulations or
compliance initiatives, such as Sarbanes-Oxley."
Network supply management also favors the larger players, according
to Dominy, which have software, sales and support staff to pull off the
complete offering.
Fersht adds IBM is getting aggressive with its business process
outsourcing, where the Armonk, N.Y.-based computer giant provided high
level services around PeopleSoft software human capital management
software.
A perfect example of this is the joint $1 billion, five-year partnership that bundles WebSphere middleware in every future
shipment of PeopleSoft products. Big Blue followed
up with an additional five-year partnership with Siebel Systems to
advance its vision of on-demand customer relationship management (CRM)
and Business Intelligence software.
"When we looked at what IBM wanted to do, all we could tell is that
they want to sell WebSphere to more customers. The IBM partnership is
more about controlling 70 percent of the Human Resource software
market," Fersht told internetnews.com.
Dominy notes that SAP is a winner, because even though it will
compete more fiercely with fewer players, the battle between Oracle and
PeopleSoft allowed SAP to quietly peel off more market share. The
German-owned firm has kept a low profile for the most part with only the
product release such as the latest version of SAP Business One for small
and midsize businesses and the occasional customer win like its
estimated $35 million contract
to replace aging software at the U.S. Postal Service.
SAP's success could also help Microsoft in its pursuits to grow
beyond its mid-market presence, courtesy of its Great Plains platform.
Beyond Microsoft's one-time plan to consider
a merger with SAP, the two companies have applications that already
compliment each other, including Microsoft's Biz Talk server with SAP's
connectors as well as SAP's NetWeaver support for Microsoft .NET
products and smart client technology. But Fersht also noted that
Microsoft is the largest Web services provider hands down, which is of
great interest to SAP.
Did PeopleSoft Implode?
Don't Fear 'OracleSoft' Say Analysts
