PeopleSoft application management service on tap

Against the backdrop of Oracle's continuing takeover bid, PeopleSoft has unveiled a suite of application management services to let its customers outsource some or all of the technical support for their on-premises PeopleSoft deployments.

The new services, which are available on a subscription basis, are designed for PeopleSoft's Enterprise line and its EnterpriseOne and World products, which were gained though the acquisition of J.D. Edwards. The new services tackle four primary areas: maintenance, administration, performance and end-user support.

PeopleSoft's maintenance services provide system diagnosis and include service pack management. Its administration services focus on uptime and availability, and monitor application metrics such as job queues and memory utilization.

On the performance front, PeopleSoft's so-called Extended Services include performance tuning, customizations, change-control management and disaster recovery. End-user services focus on technical support to augment existing customer-based help desks.

PeopleSoft's global services team will deliver the new services remotely through company facilities in Pleasanton, Calif.; Chicago; Toronto; Madrid, Spain; Amsterdam; Sydney, Australia; and Bangalore, India.

Product support is a key area of concern for PeopleSoft users, in light of Oracle's hostile bid.

AMR Research recently surveyed PeopleSoft customers on their expectations and plans if Oracle succeeds in acquiring PeopleSoft. It found a majority of users - former J.D. Edwards customers, in particular - have low expectations for the fate of their product and are willing to move to third-party support to save money.

Among 150 PeopleSoft customers surveyed, 47% expect Oracle to offer no new features, and 17% expect minimal enhancements.

More than half - 63% - said they would drop maintenance immediately, or if Oracle stops enhancing the product, or if third-party support was available for half the prices of their current maintenance charges.

Lower-rate maintenance could be available from vendors such as TomorrowNow, which built its business by providing services for PeopleSoft applications. TomorrowNow says its clients save up to 50% off annual maintenance and support fees.

The trade-off in going with an alternative source for maintenance such as TomorrowNow is that a company gives up getting its vendor's product enhancements but gains significantly reduced costs.

Increasingly these vendors are getting a second look from ERP customers - particularly if those customers don't plan to upgrade their ERP software, analysts say. More companies will move to third-party support for their ERP applications if they are content with current features and see no indication that the ERP vendor is investing in enhancements of value to them, says Bill Swanton, vice president of research at AMR.

"The TomorrowNow-type business model of providing support and statutory patches for 50% of regular maintenance prices will, if nothing else, put price pressure on Oracle as it competes to keep the business," Swanton wrote in a recent research brief. "Companies are only willing to pay standard support rates for a product with a long and growing life ahead of it."