Oracle Certifies PeopleSoft Applications with Oracle® Fusion Middleware

Oracle made this announcement on December 13, 2005. You can read the full press release at this link:
Fusion_Press_Release

Note the following in the middle of the press release:
Pricing
Oracle Fusion Middleware for PeopleSoft customers is available for $60,000 per CPU. It features key components of Oracle Fusion Middleware including portal, BPEL, business-to-business integration, business activity monitoring, business intelligence, single sign-on, Web cache and the Oracle Fusion Middleware PeopleSoft adapter. Terms, conditions and restrictions apply

So, if I've got 3 application servers with 4 processors each, then it's going to cost me $720,000 to purchase Fusion Middleware. Additionally, I'm going to have to pay about $160,000 per year for support.

When we purchased PeopleSoft, it came bundled with BEA Tuxedo and WebLogic. Support for the middleware layer is included in our annual applications support fee. Now, it is true that there are components in the Fusion Middleware that are not in the BEA middleware. But do any of these components add any value to a PeopleSoft shop?

PeopleTools bundled with BEA already includes business-to-business integration, a portal, single sign-on, and web cache. The current generation of PeopleSoft applications can't do anything with BEPL and there are no delivered integration points between the Oracle BI tools and current PeopleSoft applications.

So, somebody tell me, what am I getting for three-quarters of a million bucks? Perhaps the more important question in regard to what this means for PeopleSoft customers who eventually want to upgrade to Fusion. Is Oracle going to try to charge customers to use the required middleware at upgrade time? If so, then they haven't been upfront with the customers. If not, then why charge them now? Why not encourage them to get involved with the Fusion Middleware now in order bind them more tightly to Oracle to help stem future defections?

How Do Oracle Support Policies Affect My Ability to Upgrade to Fusion?

As I noted in my last posting, Oracle is offering a direct upgrade path from versions 8.8, 8.9, and 9.0 to Fusion. Those on earlier releases will need to make a multiple pass upgrade. Lately, Oracle has been touting a "Lifetime Support Policy", which suggests that any company that remains on support will be able to upgrade to Fusion. But is this really the case? Let's take a closer look at Oracle's support policies.

For the first 5 years after a release, Oracle will provide Premier Support.
Premier Support provides:
Access to new releases
Technical support
Updates, fixes, and security alerts
Tax, legal, and regulatory updates
Upgrade scripts
Certification with new third-party products/versions

After 5 years, a product goes into Sustaining Support.
Sustaining Support provides:
Access to new releases
Technical support
Pre-existing fixes for your solution
Customers may also obtain customer specific fixes at an additional fee

For three years after a product is no longer eligible for Premier Support, it is eligible for Extended Support. Extended support provides companies with all of the features of Premier Support except for certification with third-party products and versions. I don't have any good insight as to how much Oracle is charging for Extended Support.

For those companies that are planning to upgraded to Fusion, what is most important is that Upgrade Scripts are included in Premier Support but not in Sustaining Support. This means that unless a company is paying for Extended Support, there is no guarantee that Oracle will support that company with any issues that arise during the upgrade process. Here are the release dates for versions 8.8 and higher of CRM, Financial/Supply Chain and HRMS products. As it stand, these will no longer have Upgrade Script support 5 years from the dates shown below:

Q4 2002--CRM 8.8 and HRMS 8.8
Q4 2003--Financials/Supply Chain 8.8
Q4 2004--CRM 8.9 and HRMS 8.9
Q3 2005--Financials/Supply Chain 8.9

Now, let's look at the Fusion Roadmap. Oracle has stated publicly that the first Fusion Applications are planned for 2007 and a Fusion Application Suite is scheduled for 2008. However, they also acknowledges that the timing these plans may change. If we assume these dates to be accurate, however, this means that HRMS and CRM users on release 8.8 will have passed the Premier Support window well before a full Fusion Suite is available. For HRMS users, this is particularly critical since they cannot operate reliably without tax support. The picture isn't much brighter for Financial/Supply chain users since, based in this roadmap, they would likely only have a few months to execute an upgrade to maintain uninterrupted support.

Unless Oracle changes their support policies, it doesn't seem likely that companies on 8.8 versions will have the opportunity to wait for Fusion. In fact, 8.9 users are also at risk if the Fusion suite is delayed significantly.

My recommendation:
Companies that are currently on 8.4 and that want to be on the Fusion path should be immediately planning to upgrade to version 8.9 now or to quickly move to 9.0 when it is released and to be prepared to pay for Extended Support. Companies that are currently on 8.8 should be planning to upgrade to version 9.0 sometime in 2006 or 2007.

What's in the Pipeline for new PeopleSoft Releases?

On its web site, Oracle describes Fusion as "...Oracle's vision for next-generation enterprise technologies, applications, and services that will revolutionize business. The core of this vision is to protect customer investments and to extend and evolve the best functionality from PeopleSoft, JD Edwards, and Oracle product lines." Development is continuing on existing product lines. But, evenually, they will all merge into the new Fusion product.

As of this writing, the current version of PeopleSoft applications is 8.9. This version was released in the latter half of 2005, after the Oracle takeover. However, most of the work that was done in regard to defining the functions and features of this release were done under the prior regime. By the time the merger occurred, the 8.9 features had been frozen and most of the code had already been written.

Oracle has promised a 9.0 version of PeopleSoft Enterprise. I would expect that it will probably come out sometime in the third quarter of 2006. Unlike previous major releases, 9.0 will not include a move to a significantly different version of PeopleTools. When version 8 was released, it required a move to PeopleTools 8. PeopleTools 8 was significantly different than earlier releases. 7.5 applications were not compatible with 8.0 tools and visa versa. This is not the case for PeopleSoft 9.0, which will be released on PeopleTools 8.48. Earlier versions of PeopleSoft applications from 8.4 to 8.9 will be supported on on the 8.48 Tools release. There are no major architectural or systemic changes between 8.9 and 9.0. So, while the version number makes this seem like a major release like version 8, it is really more of a dot release. I expect that the difference between 8.9 and 9.0 will be comparable to the difference between 8.8 and 8.9. I expect that the only reason that they are calling it 9.0 is that it sounds a whole lot better from a marketing perspective than to call it 8.91 or something like that.

Version 9.0 will be the last release of PeopleSoft Enterprise. Once it's in the can, all development efforts will move to Fusion. Oracle has announced that there will be a direct upgrade path to Fusion from 8.8, 8.9, and 9.0 versions of PeopleSoft Enterprise. Organizations on earlier releases will only be able to upgrade to Fusion by first upgrading to one of these releases.

Next time, I'll take a look at the current support polices for PeopleSoft applications and what they mean for companies that are thinking about migrating to Fusion.