Oracle wants to buy the merged PeopleSoft and JD Edwards entity for $5.1 billion.
The implications of having only two truly global packaged enterprise software vendors are significant. The background to the initial sale of Baan is less important here, but PeopleSoft and JD Edwards becoming one made sense at many levels. It is well acknowledged that the application software business is maturing, and industry observers can see that in order to maintain growth, application software vendors needed to expand their remit to cover not only application functionality, but also the environment that their client companies operate in.
Hence, the slew of platform/architecture related developments: SAP with NetWeaver, Siebel with UAN, Oracle pushing its application server as the primary enterprise platform, and the combined entity that was PeopleSoft and JD Edwards leaning very heavily towards IBM in what could be seen as a very compelling (and fruitful for IBM) proposition.
The application software vendors want to own not just the applications and business processes within packaged apps, they want to own the business environment too. Clearly, the current four-way split is very heavily weighted in IBM’s favor, as it has the second biggest global ISV aligned with its infrastructure and platform offerings.
Oracle’s bid for PeopleSoft, if anything, demonstrates that Oracle is not ready to sit and watch IBM’s platform and database pervade a significant chunk of the market without IBM lifting a finger. It has its own visions of the future – one that runs on Oracle’s application server, supported by the Oracle database. If Oracle gets to own the installed base of PeopleSoft AND JD Edwards, we can be sure of some interesting times ahead but, ultimately, rather less openness and choice for the user.
