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PeopleSoft buyout will halt ERP development

Cliff Saran
Oracle's plans to take over Peoplesoft may tie users into long maintenance contracts with no further development of PeopleSoft and JD Edwards software.

Chuck Phillips, executive vice-president at Oracle, said the ERP supplier would focus on maintenance rather than on generating new licences.

"All development will go into enhancing existing products. We will only add the features the users ask for," he said.

Maintenance contracts would generate Oracle a revenue stream of $800m (£500m) from Peoplesoft users, Phillips said.

He said Oracle could offer better maintenance for Peoplesoft and JD Edwards products as it could direct its spending to product maintenance rather than sales and marketing.

Many PeopleSoft users are already running Oracle databases and ERP software. "It does not make sense for users to run their HR on a different technology stack and pay a separate maintenance contract for their PeopleSoft HR," Phillips said.

After the JD Edwards merger, Phillips confirmed that the company had no intention of selling three ERP product families.

Art Hunt, president of the Oracle Applications Users Group, said he was looking forward to Oracle acquiring PeopleSoft.

Hunt said Oracle had given reassurances it would not alienate PeopleSoft products, which would continue to be improved by Oracle for 10 years or more.

But this maintenance will come at a cost. "The $800m maintenance revenue from PeopleSoft users would be very helpful," he said.

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