Microsoft Waves Discounts Under PeopleSoft Users’ Noses

In spite of having proclaimed itself a noncompetitor during the U.S. Department of Justice’s trial against Oracle Corp.’s takeover of PeopleSoft Inc., Microsoft Corp. is acting very similar to a competitor, wasting no time in offering migration services and hefty discounts to lure PeopleSoft users into migrating to its business management applications.

The company on Monday paved the path from PeopleSoft to Microsoft by detailing a migration program to get people off of PeopleSoft’s renditions of J.D. Edwards applications, PeopleSoft World and PeopleSoft Enterprise.

Microsoft is sweetening the deal with a 25 percent discount on licenses for its Business Solutions applications Axapta and Great Plains. It also offered a 25 percent discount for the first year of participation in its Business Solutions support and enhancement program. The discounts apply to purchases between now and June 22.

The migration program offers planning guides to help customers evaluate applications and platforms, along with tools to get the job done faster. Microsoft is also offering help from systems integrators who specialize in PeopleSoft migration and from trainers well-versed in PeopleSoft application conversion who can cross-train companies’ sales personnel.

The company is billing the migration path as being designed to help PeopleSoft customers and partners respond to the “business challenges” presented by Oracle’s acquisition of PeopleSoft. Tami Reller, corporate vice president of Microsoft Business Solutions Group, defined those challenges as being companies’ lack of belief in Oracle’s stated product road map, among other things.

“If you look at PeopleSoft’s customers, an ERP [enterprise resource planning] customer is always thinking about, ‘What is the vendor’s ability to deliver not only a compelling road map, but how well will they support me in all aspects moving forward?'” said Reller, in Fargo, N.D. “What will Oracle mean to them? What will investments in research and development be like? What will daily interactions be like? What commitment will they have to this product line? This is very critical to these customers. We’ve been delivering business applications to these customers for 25 years. We understand that.”

During the 18-month battle to take over PeopleSoft, Oracle changed its tune a few times when it came to whether it would continue to support PeopleSoft and J.D. Edwards applications. A recent iteration of the support road map came at OracleWorld in December, when CEO Larry Ellison said in his keynote address that the company would not only support the PeopleSoft 8 product line but would complete the PeopleSoft 9 product line, now under development.

Reller said that she believes customers aren’t swallowing it. “They will only listen to the top-level noise a bit, and they will watch more how much talent Oracle keeps from PeopleSoft,” she said. “So much of your ability to deliver value, whether it’s day-to-day support or ongoing R&D value, is through talent you keep onboard.”

Oracle sealed the PeopleSoft deal with over 97 percent of outstanding shares in its grasp. Read more here.

Ellison has stated that layoffs could number 6,000 as the companies merge. Oracle is slated to deliver a more exact number on Jan. 15. After that, Oracle is set to officially launch the combined company on Jan. 18 with a Webcast dubbed “Oracle and PeopleSoft—Better Together.” Oracle Co-Presidents Safra Catz and Charles Phillips will present it.

The migration program is for all of the Business Solutions group’s product lines, Reller said. But Microsoft is recommending that PeopleSoft World and PeopleSoft EnterpriseOne customers consider migrating to Axapta and that PeopleSoft Enterprise customers in the United States and Canada consider Great Plains.

Reller said that the ex-J.D. Edwards customers running EnterpriseOne and World tend to be customers in the distributing and manufacturing environment, which are “fairly complex” environments, making Axapta a better fit. Enterprise users tend to be customers who value financial functionality and who are more in a services environment, where Great Plains is strong, she said.

Microsoft maintained throughout the antitrust trial that it wasn’t close to being a competitor with Oracle, PeopleSoft and SAP AG in the enterprise application space. The fact that the Redmond, Wash., company is offering to serve as a surrogate for PeopleSoft, on the face of it, appears to be a contradiction to Microsoft’s earlier self-portrayal.

But Reller said that it all boils down to customer base overlap, which doesn’t constitute a contradiction. “If you look at the PeopleSoft customer base, which of course includes the JDE customer base, there is a substantial portion or subset of those customers that are within our target market,” she said. “That’s not only midsized organizations but also some larger corporations and many divisions of large enterprises. If you look across those segments, you’ll find PeopleSoft customers across that.”

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