Oracle VS PeopleSoftAgendaSlide 3BackGround Info.Slide 5Products:How we can RELATE? Ex. Business BenefitHistoryProductsWhy did Oracle want PeopleSoft?PeopleSoft’s Customer BaseLosing Customers?CompetitionSlide 14Vertical IntegrationMerger TimelineStrategies Oracle used to keep PeopleSoft usersSlide 18How IBM’s DB2 was affectedOutcome and current statusWhat We Learned:ReferencesOracle VS PeopleSoftAdrienne DuttonDanica MedinaTheresa VillanoAgendaOracle vs. PeopleSoft: Big software companies in actionThe players: Oracle and PeopleSoftMotivation: Why did Oracle want the mergerA timelineThe fallout: IBM?Lessons LearnedApplicationsERPCRMCRM DSSDatabasesBackendOracleIBMPeopleSoft SAPBackGround Info.Enterprise resource planning systems (ERPs) are management information systems (MISs) that integrate and automate many of the business practices associated with the operations or production and distribution aspects of a company. Before merger, PeopleSoft was a major provider of ERP. SAP was their biggest competitor and had the biggest market share.Oracle initially only made databases, but eventually expanded their market by providing ERP services.History CEO, Larry Ellison, started Oracle 30 years ago in 1977 Ellison envisioned a working prototype for a relational database model Changed business computing, as we know itStarted as only a database company then started getting software and later added in ERPIn 2005, Oracle technology found in nearly every industry around the world In 98 of the Fortune 100 companies’ officesOracle’s BusinessThe world's largest enterprise software companyhttp://www.oracle.com/Products:Main products provided by Oracle include the following:Database2005 sales rose 15%; $1.1 of 11.98 Billion Dollars Total SalesApplicationssuch as Oracle ERP Services (Consulting, Advanced Product Service, and Education) Fusion Middlewaretakes ERP & works together with all layersThe software products make money two ways: New software licenses Ongoing license fees and product supportAssortment of Products: http://www.oracle.com/products/product_list.htmlHow we can RELATE? Ex. Business Benefit Consumer ProductsElectronic Arts (EA) Runs the Sims Online Game FasterUsing “Oracle Real Application Clusters” on LinuxBasically , used ERP Saved $3.4 MillionNot just for databases but service & game applicationsFull Case Study:http://www.oracle.com/customers/studies/roi/ea.pdfHistoryFounded 1987, former CEO Craig ConwayPeopleSoft users often bought Oracle’s Database as a backend product 2002 – Despite having a good product, they were not profitable2003 – Acquired J.D. Edwards to expand market share PeopleSoft’s Business DDERP software An ERP provider: Innovative and flexible ERPsolution that runs on different hardware anddifferent database packages. The ERP program “talks to” different database management systems (DBMS) to manage the data (e.g. Oracle and IBM’s DB2). Reference: http://www.peoplesoft.com/corp/en/public_index.jspProductsPeopleSoft® family of products from HR to Financials to Support:Campus SolutionsCustomer Relationship Management SolutionsEnterprise Performance ManagementFinancial ManagementHuman Capital Management (eDevelopment)Service Automation (IT & Billing) Relationship ManagementSupply Chain ManagementReference: http://www.oracle.com/applications/peoplesoft/all_ent_products.htmlWhy did Oracle want PeopleSoft?Customer BaseCompetitionVertical IntegrationPeopleSoft’s Customer BaseThe growth for new software licenses is beginning to slow.Companies such as Oracle are increasingly relying on maintenance fees from current customers.These fees produce profit margins between 80-90%.Before the Merger, PeopleSoft had 5,100 current customers that are paying maintenance fees and upgrade fees.Oracle can spread their development costs over a larger set of customersLosing Customers?However, because of the merger, Oracle risks losing some of PeopleSoft’s clients.As a result, they have announced to develop and improve PeopleSoft’s products for at least ten years.However, the long term strategy is to get PeopleSoft customers to switch over to Oracle products. Oracle will offer free application software licenses in replace for the PeopleSoft licenses.CompetitionSAP was the dominant player in ERP, but the merger brought three smaller companies together (J.D. Edwards, PeopleSoft, and Oracle)Oracle’s competitive advantage has been improved because their market share in ERP has surpassed SAP’s market share.Oracle will now have the scale it needs to compete on a global basis against competitors.ApplicationsERPCRMCRM DSSDatabasesBackendMerger Creates: VERTICAL INTEGRATIONVertical IntegrationThe merger will create vertical integration for Oracle. Oracle can now offer customers “packages” that include applications in addition to databases. Customers no longer have to buy things from separate companies, but can buy a complete package from Oracle. PeopleSoft applications also run on IBM’s DB2 so perhaps by buying PeopleSoft, Oracle could get more ERP customers to use Oracle’s database productMerger TimelineJune, 2003 The merger between PeopleSoft and J.D. Edwards creates a business software giant.Days after PeopleSoft's J.D. Edwards purchase, Oracle offers to buy PeopleSoft for $5.1 billion.The Department of Justice wants more information from Oracle about its PeopleSoft intentions.February, 2004 Department of Justice files antitrust lawsuit to block Oracle's PeopleSoft bid.March, 2004The mid-tier market becomes a concern for U.S. District Court Judge September, 2004 Judge declares Oracle free to buy PeopleSoft in blow to Deptartment of Justice.December, 2004 PeopleSoft's board agree to sell the farm for $10.3 billion.Strategies Oracle used to keep PeopleSoft usersOracle admits its first challenge is to hold onto PeopleSoft customers and their maintenance contracts“One thing will remain constant - our unrelenting support of your business”“Project Fusion” – the company’s next-generation information-oriented application architecture that combines Oracle, PeopleSoft, and J.D. Edwards under a standards-based Java baseOracle’s Fusion 1.0 is middleware. It will try to handle requests
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