Resellers Differ on Impact of Oracle-PeopleSoft Outcome

By Karen Schwartz  |  Posted 2004-07-14 Email Print this article Print
 
 
 
 
 
 
 

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Some resellers and systems integrators think a merger of the two companies would increase their workload as products are integrated and customers are forced to shift—but competition in the sector could drop after that.

With Oracle and PeopleSoft battling it out in court, resellers and systems integrators have differing and sometimes conflicting opinions about how the outcome may eventually impact their businesses.

The proposed merger could either create more work for resellers or result in less work, depending on several variables, said Michael James, a vice president at S&P Solutions Inc., a Cleveland company that provides consulting services, software and asset management solutions to Fortune 1000 companies.

The combined company might initially create more work for resellers, he said, as the products are merged and customers must shift from one product to another. But he said that work would unfold over several years as the products are slowly merged.

But after that initial period, the merged company might actually create less work as competition in the sector decreases, he said. To combat that decrease, James said he expects to fill the gap by installing application solutions from Oracle's competitors—a move he says many companies will make as they become frustrated by the situation.

"If Oracle is successful in buying PeopleSoft, you'll see a number of people make the jump to SAP because they don't want to deal with Oracle," he predicted. "Customers have a love-hate relationship with Oracle, and if they are forced to go to Oracle, they just might decide to switch altogether."

Oracle and the Justice Department recently summed up their cases before closing oral arguments. Click here to read more.

James said resellers also could lose work to Oracle if it is able to build its consulting organization to respond to customers migrating from PeopleSoft to Oracle.

Jeff Bawol, vice president of enterprise software and storage at Avnet Hall-Mark, the Tempe, Ariz., reseller arm of Avnet Inc., said he sees significant opportunities from the expected merger.

"It gives the Oracle reseller different products to focus on," he said. "That can present tremendous opportunities. All in all, we see it more as a positive than a negative."

Others agree. "The PeopleSoft-Oracle battle can only help smaller developers like us," said Rebecca Gill, a vice president at Toledo, Ohio-based solutions provider Tech Group International Ltd. Gill said such acquisitions and court battles only help prove to clients that smaller, more focused companies can provide more stability and can help them weather these changes with less pain.

"Years ago, we battled the smaller supplier fears from clients, but now we no longer need to because so many larger firms are being acquired or face other issues, such as court battles," she said.

PeopleSoft granted hefty discounts to outsell Oracle. Click here to read more.

But all things being equal, James said he would prefer if Oracle and PeopleSoft remained two separate companies.

"The more competition, the better," he said. "By having more than two major players, there will always be one company that's hungrier and willing to undercut the price, which keeps the lid on prices."

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