What's it all about, Larry?
Published: 16 Dec 2003 14:05 GMT
But what of the underlying logic of Ellison's argument? If consolidation is the name of the game, why fight it? Interestingly, PeopleSoft's Swasey agrees there is consolidation, and that Oracle's is a consolidation move. He could hardly otherwise, given his company's $1.8bn July acquisition of fellow ERP-er J.D. Edwards. But "we see the market as consolidating, yes, but still expanding."
What could that possibly mean? A clue is provided by Ovum's Bradshaw: "The enterprise apps market is expanding -- but not through licence sales, but services," he says. The idea is that there is less interest in buying more software, but lots of interest (and need?) to make it all work together.
Hence the PeopleSoft version of consolidation -- we (that is you, the customer base) want big players. Which is fine so long as we're (PeopleSoft) one of them, not part of someone even bigger. "A company like General Motors wants to work with players able to offer breadth, depth, and global reach -- and CIOs want one back to pat, they want to bring in two or three suppliers to talk with, not 12," he says, before highlighting the strength of the combined PeopleSoft-J.D. Edwards combo and its 12,000 customers worldwide.
But of course that logic doesn't work for all levels of the market. "Only the very biggest companies want that kind of relationship with their suppliers -- SMEs certainly don't," adds Kellett.
"This style of argument about consolidation becomes moot when you're talking about multibillion-dollar companies coming together. Consolidation is about taking out smaller players, as indeed PeopleSoft did with J.D. Edwards, or has happened to Baan. This could be two of the three largest players merging -- that's not a maturing market dynamic," warns Ovum's Bradshaw.
Life won't get easier
One thing's for sure -- whatever happens, in one respect your life won't get easier either way. "The fact is customers would still have lots of different ERP systems albeit from a smaller number of manufacturers, and would still face the same integration problems," says Ovum's Bradshaw. "An Oracle-PeopleSoft combination won't help them there any time soon."
That's because enterprise applications are hard; they solve complex problems; and we have a lot of them that aren't going away. "SAP spent the 1990s telling everyone they should have wall to wall R/3," muses Commerce Quest's Thomson. "Now they have finally realised that the reality is no one will do that, and they have recently started opening up and changing their message and how they view customers as a result."
Never forget the suspicion that Oracle may be taking this historical inevitability bit with less than total seriousness. "There are a lot of very smart people there, and you have to suspect the real motivation is quite different from what we read in the press," says European general manager for Informatica, Patrick Buffet. "You just can't believe it's just about consolidation."
So how would the software landscape look post a possibly less than likely Oracle-PeopleSoft merger going ahead? Possibly less choice, and in the end, some issues for users. "Eventually, they'd face some sort of pressure or inducement to move off PeopleSoft, with all the hurdles that can throw up," warns Kellett.
But the underlying realities of a complex and heterogeneous enterprise apps world wouldn't be 'solved' by any Ellison-style historical materialistic type philosophy. Probably to his relief. "I think Oracle would be utterly horrified if they did succeed," Bradshaw says. "It's all gotten so acrimonious, it'd be brutal. What a way to bring the PeopleSoft and J.D. Edwards people together -- they've bonded through both hating Oracle."
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