J.D. Edwards Resellers Worry about Oracle Competition

By John Pallatto  |  Posted 2005-07-08 Email Print this article Print

Updated: J.D. Edwards resellers say they are concerned that Oracle's direct-sales organization will be taking a greater share of the midsized corporate sales that they used to get.

REDWOOD CITY, Calif.—J.D. Edwards resellers and system integrators expressed concern Thursday about how big a piece of the market pie Oracle will share with them even as they expressed satisfaction that the enterprise resource product line has a future at least through 2013.

Oracle Corp. convened a partner summit for resellers, integrators and ISVs at its headquarters here Thursday to give them an update on its product strategy for the J.D. Edwards ERP product line that it acquired through its buyout of PeopleSoft Inc. in December 2004.

Under this plan, Oracle will continue to upgrade and support the J.D. Edwards World and J.D. EnterpriseOne ERP applications until the products are fully integrated into Oracle's Fusion middleware architecture. Oracle officials have said that these products will retain a separate identity and upgrade path under the J.D. Edwards name at least until 2013.

During its prolonged legal battle to buy out PeopleSoft, Oracle had promised to support the PeopleSoft and J.D. Edwards product lines for at least 10 years after it acquired the product. While those plans stretch eight years into future from the current date, they do allow Oracle to keep its promise if the time span is calculated from June 2003, when Oracle first announced its bid for PeopleSoft.

The EnterpriseOne suite includes manufacturing, supply chain, human capital management, financial management, customer relationship management and asset life-cycle management.

J.D. Edwards World includes manufacturing management, homebuilder management, distribution management, financial management, human capital management and customer self-service applications that are designed for SMBs (small and midsized businesses) and that run on the IBM iSeries midrange computer system.

Click here to read an interview with Patricia Dues, president of the Oracle Applications User Group, who talks about the Oracle Fusion Council, a user group effort to advise Oracle on integrating its disparate application software on a middleware platform.

Clients are generally relieved to learn that Oracle will continue to support J.D. Edwards for at least the next eight years, said Larry Campbell, president of CD Group Inc., an ERP application consultant and reseller based in Norcross, Ga. The company has about 400 clients, and those that rely on J.D. Edwards applications have been "glad to hear that they have an upgrade path," Campbell said.

But Campbell said he remains concerned that the resellers will be limited to dealing with midsized businesses of $100 million or less. Now any companies with revenue of more than $150 million will be served by Oracle's direct sales force, although resellers still will have an opportunity to provide consulting and integration services to these companies, he said.

The previous limit used to be $150 million, and Campbell said his company would like to be able to participate in the market to the full extent of its capabilities.

An Oracle spokesperson Friday said that Oracle has actually raised the customer revenue ceiling to $500 million as of July 1. Oracle has been talking to the PeopleSoft and J.D. Edwards channels partners about raising the ceiling since last February.

Sharing the market pie.

Lars Steen, managing director of SYSteam Applications AB, a J.D. Edwards reseller and system integrator based in Huskvarna, Sweden, said he also was concerned about the degree to which his company will be allowed to share sales opportunities with Oracle's direct sales force.

Click here to read the details about Oracle's Fusion middleware platform.

SYSteam is looking for some indication that it will have an opportunity to win the same level of business as it had before the merger, Steen said.

J.D. Edwards has a substantial installed base in Europe, with more than 150 customer sites in Scandinavia alone. The European customer base is particularly loyal, and SYSteam wants an equal opportunity to work with these customers as they update their installations, he said.

"Of course I'm encouraged" that Oracle is being more clear about the upgrade plans for the J.D. Edwards product line, Steen said. However, "that message has been fragmented and almost nonexistent" at times in the six months since Oracle acquired the J.D. Edwards applications.

He said Oracle must continue doing more to make it clear to customers that the J.D. Edwards product line has an upgrade path for at least the next eight years. "It's a good message, and they need to be sending that out to the whole market in a consistent way," Steen said.

It was important for Oracle to show some level of "sensitivity" to the concerns of J.D. Edwards customers who are now the joint customers of Oracle and the reseller community, said Rodney Brown, president of Sadaka Technology Group LLC, an ERP application reseller and services company based in Minneapolis.

The upgrade plans that Oracle has described as part of its middleware strategy will help "eliminatory any confusion in the marketplace about what [customers] are getting and when they are getting it," Brown said.

"There still are a lot of details that have to be worked out," he said. But at least customers are getting "some assurances that they will be OK for the next eight years."

It is also Brown's hope that when 2013 rolls around, the J.D. Edwards and PeopleSoft technology will continue to exist in some form in which Oracle "takes the best of the independent brands" and come up with a fused product that is "richer, easier to use and easier to maintain."

Editor's Note: This story was updated to include information from an Oracle spokesperson.

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John Pallatto John Pallatto is eWEEK.com's Enterprise Applications Center editor. His near 30 years of experience as a professional journalist began as a member of the founding staff of PC Week in March 1984. Pallatto was PC Week's West Coast bureau chief, a senior editor at Ziff Davis' Internet Computing magazine and the West Coast bureau chief at Internet World magazine.

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