Quest’s annual Northeast conference, held last week at the Mohegan Sun in Connecticut, is always a great source of news, information and gossip.  This year was no exception.  There was no earth-shaking news about either JD Edwards or PeopleSoft, but the era when dramatic things happen to either of them is long past.  Instead, executives from each of these product lines came and made the usual passionate plea to keep upgrading to the newer releases.  In that sense, nothing has changed since Collaborate in April where Lyle Ekdahl offered the JDE faithful three messages – Upgrade, upgrade, and upgrade! 

The PeopleSoft keynote did provide some additional insight into why Oracle seems to care so deeply about which release of its products you are using.  The 5,000+ PeopleSoft customers contribute $1.3 billion per year to Oracle’s revenues (out of $34 billion).  Over a billion of that comes from maintenance.  The rest comes largely from sales of additional modules to existing customers and from sales to 200 – 300 new customers. 

Oracle does not divulge profit by product line, but it is obviously spending far less than $1.3 billion on PeopleSoft.  The difference falls straight to the bottom line.  The numbers for JDE are roughly in the same range.  The JDE customer base is over 6,000, revenues are under $1 billion (but not far), and a few hundred new accounts offset occasional losses.  Between them, JDE and PeopleSoft appear to be contributing close to a billion dollars per year to Oracle’s margins.  Any speculation that Oracle does not care about our community is thus highly uninformed – we are a gift that keeps on giving. 

The party will continue for Oracle as long as it can keep us paying maintenance.  The way to do that is to get us to care about the future improvements that we get for our maintenance money.  In the near term, we get most of that value through upgrades.  Oracle tries to balance the need to provide us with improved capability on a regular basis with the requirement to limit how often we have to go through the upgrade process. 

With all this in mind, Oracle has settled on a schedule of doing a major release for JDE and PeopleSoft approximately every three years with more modest “feature pack” releases every year.  Tools releases also come once per year.  Vital problem fixes and things like tax table updates are done as needed. 

As time passes, a much greater incentive for continuing to pay maintenance will be the ability to upgrade to the equivalent Fusion application module at no cost.  After a very long wait, Fusion Applications will finally be formally announced at OpenWorld in early October baring a disaster during pilot testing between now and then. 

I was able to pick up some additional intelligence about how things are going with Fusion Applications at the conference as well which I will share in my next posting.

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