Commentary: The enterprise applications tizzy

By Jennifer Chew, Senior Analyst

With the enterprise resource planning market in a tizzy, customers and prospects can help protect themselves against an uncertain future by seeking outsourcing help, postponing new investments and turning to safe bets like Microsoft and SAP.

The major vendors in the ERP arena are in an uproar that is not likely to be settled soon. Oracle has launched a hostile bid for PeopleSoft, PeopleSoft is attempting a friendly acquisition of J.D. Edwards, and J.D. Edwards is lobbying in the press for antitrust regulators to stop Oracle's actions. Until the storm abates, what should customers do to minimize the risk associated with application investments?

• J.D. Edwards users: Seek out an outsourcing partner. Whether Oracle or PeopleSoft prevails in its takeover attempts, J.D. Edwards will belong to someone else when all is said and done. This makes it very unlikely that its applications will continue on their current development and upgrade paths, a risk that J.D. Edwards users can mitigate by hiring an outsourcing partner like IBM or Cap Gemini Ernst & Young to help them survive on decreasing vendor support levels.

• PeopleSoft users: Hold off on supply chain management (SCM) purchases. Either way the coin lands, PeopleSoft will be connected with an applications partner with stronger SCM functionality. This means that current PeopleSoft

		Related story PeopleSoft formally rejects Oracle bid The software maker says Oracle's offer raises significant antitrust issues and "dramatically undervalues" the company.

• Oracle users: Hold off on human capital management (HCM) purchases. If Oracle prevails, it will beef up the HCM capabilities of its E-Business Suite with capabilities gleaned from PeopleSoft's market-leading products. Since most executives claim their company doesn't view HR applications as a strategic investment today, waiting until the dust settles is the right move for customers with a major investment in Oracle's applications.

• Prospects: Give SAP a call. The most stable vendor in the applications market right now is SAP--and it belongs on the short ist of any large company considering an ERP investment. Midmarket customers should be looking hard at Microsoft Business Solutions, which offers an attractive haven for buyers who want to sit out the mergers and acquisitions storm.

© 2003, Forrester Research, Inc. All rights reserved. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.