Oracle Corporation et al v. SAP AG et al

Filing 1206

Declaration of Nargues Motamed in Support of 1202 Statement Joint Statement in Support of Evidentiary Issues filed byOracle International Corporation. (Attachments: # 1 Exhibit A-0059, # 2 Exhibit A-6329-1, # 3 Exhibit A-0367, # 4 Exhibit A-5042, # 5 Exhibit A-5997, # 6 Exhibit A-6042-1, # 7 Exhibit A-6205-1, # 8 Exhibit A-5193, # 9 Exhibit A-5995, # 10 Exhibit A-5058, # 11 Exhibit A-5002-1, # 12 Exhibit A, # 13 Exhibit B, # 14 Exhibit C, # 15 Exhibit D, # 16 Exhibit E, # 17 Exhibit F, # 18 Exhibit G, # 19 Exhibit H, # 20 Exhibit I, # 21 Exhibit J, # 22 Exhibit K, # 23 Exhibit L, # 24 Exhibit M, # 25 Exhibit N, # 26 Exhibit PTX 0008, # 27 Exhibit PTX 0014, # 28 Exhibit PTX 0161, # 29 Exhibit O, # 30 Exhibit P, # 31 Exhibit Q, # 32 Exhibit R, # 33 Exhibit PTX 4809, # 34 Exhibit PTX 4819, # 35 Exhibit PTX 0012, # 36 Exhibit PTX 0024, # 37 Exhibit PTX 0960, # 38 Exhibit PTX 7028, # 39 Exhibit S, # 40 Exhibit T, # 41 Exhibit U, # 42 Exhibit V, # 43 Exhibit W, # 44 Exhibit PTX 8040, # 45 Exhibit PTX 2582, # 46 Exhibit X, # 47 Exhibit Y, # 48 Exhibit PTX 8112, # 49 Exhibit PTX 8111, # 50 Exhibit PTX 8108)(Related document(s) 1202 ) (Howard, Geoffrey) (Filed on 8/2/2012)

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Subject:
Attachments:

Zepecki, John
12/20/2004 7:57:38 PM
.
Agassi, Sha i [/o=$AP /ou=America2lcn=Recipie nts/cn=OOOOOO115784]
,Peoplesoft 1-2-3
Peoplesott 1-2-3 1220 04.doc

Shai,

I pulled together some thoughts on Peoplesoft opportunities (see attached documents below about ten pages in length).
Here's a relatively brief summary email as well. Please let me knowyour thoughts here and/or next steps. There is a
pretty short window of opportunity to easily attracftalent.
Thanks and regards, Johnz '

Peoplesoft 1-2-3
122004.doc

Step 1 ~. Offer support/maintenance to Peoplesoft customers.
I am not sure how broadly you envisioned this program, but supporting all product lines and system landscapes would be
difficult/expensive. Targeting heavily used rnodulesin HCM and Financials is more viable at least to start and has the
most attractive customers. There is a group called TOlTlOrrowNow offering JD Edwards support for some time that might
be a good subcontractor to allow SAP to focus on larger customers, but still support all product families.
To lead this type of effort, Tom Shields (ran HR development. now runs GSC/Sydney site) would be ideal. Geography (he
will not move from Sydney) is 'a problem, but he mightwork as a person to ramp it up. Tom is well respected and known,
he could really help to find and attract talent.
;Catherine Jensen runs support for the HeM product line. She has experience running lev'eI1/2/3 and is pretty strong. At
the next level down, there are many capable people with specific domain expertise. Most peoplesoft managers and
developers did new development and maintenance.
If the scope of support is clear and Oracle lays people off or treats people badly, building a hiring plan could be done
pretty quickly. It should be possible to recruit Peoplesoft trained people in Bangalore as well. Getting a focus and getting
some key leaders in place soon is the critical success factor, then there probably is ample talent to go after.
Opening an office in Pleasanton would be a huge win for recruiting and helping to support this initiative. The time wind~w
to determine scope of support, establish funding/business model, and establish leadership is short, By end of Q1 2005, it
will be difficult to get critical mass and executing on this effort would reqUire a sizable investment of people.
Step 2 - Integrate existing xApps and create new xApps/composites that ihtegrate with People5oft product
If Oracle delivers ten years of support for existing Peoplesoft products, the Peoplesoft installed base will freeze. Most
customers will wait before deciding t6 upgrade and/or deploy custom or point solutions to augment the core transactional
systems. SAP has an opportunity to deploy existing xApps and create new xApps to the Peoplesoft installed base. Aside
from helping to capture the Peoplesoft customer base and providing functionality that further discourage upgrade to a new
Peoplesoft version, there is incremental revenue to be made. Over time the ultimate goal is to drive upgrade to mySAP,
but realistically, selling add on applications for three to five years is the best and most straightforward revenue opportunity.
Eventualiy Oracle may figure out that offering composite processes in the eBizSuite that integrates to deployed Peoplesoft
applications is much easier than driving upgrades. I would estimate that Oracle takes at least a year or more to
understand this reality. SAP has the ability to develop new solutions, seed Netweaver and the SAP footprint, and drive
revenue. Many of the solutions that would be attractive to Peoplesoft customers probably fit into an SAP roadmap.
Attracting domain experts to support this initiative is possible as well. The solution areas of interest would drive the list of
people to go after. Visha! mentioned that Services Procurement is of some interest - I can highly recommend some
functional experts and architects in this area.
'

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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
Case #: 07-cv-01658-PJH
PLNTF EXHIBIT NO. 0006
Date Admitted:
_
By:
_
Nichole Heuerman, Deputy Clerk

PTX_0006 Page 1 of 16

Step 3 - Provide upgrade from Peoplesoft to SAP

datamigratl~n

)peoPlesottwas shifting to leverage Ascential's DataStage as the
engine forapplication upgrade. HCM8.9
. released this month was the first application to leverage this approach. The "A to Bit upgrade essentially is a hew Install .
and data is migrated/converted froin system A (old version) to system B (new version). A customer would have fa
manually reconcile and migrate ahy customizations.
Peoplesoft's previous approach was to upgradenin place" or to oonvert a system to the new version without a new install
(Le.like SAP). As Peoplesoft applications and PeopleTools grew more complex and customers "skipped" entire versions
of software (Le. go from HR 8 to HR 8.8 and skip HR 8.4 completely), the traditional approach was becoming more and
more problematic.
It remains to be seen whether Oracle continues this type of upgrade. Changing courses would delay upgrade availability
significantly for HeM 8.9 and 01 05 planned releases. Regardless, SAP could create its own A to B lipgrade maps where
"An is a Peoplesoft version and liB" is mySAP. Most of the ETL maps are simple in nature and could be done in a low cost
country (Peoplesoft used this labor pool too). The more complex maps would require domain experts from both
"Peoplesoft and SAP to map both data and business concepts.
On the talent side, the understanding of the data models and business concepts in Peeplesoft systems is hard to find. The
EPM data warehouse team I ran had experts in Peoplesoft's data models (including JOE models) and core Peoplesoft
.
business concepts.

I had a very capable manager (Naghi Prasad) and project manager (Alan Bouris) who could drive an initiative in this area.
Oracle does not offer packaged warehouse solutions in the same way as Peoplesoft, I am not sure that this team avoids
layoffs or could be placed badly in the Oracle organization. There may be an opportunity to pick up as much of this team
as is desired.
Oracle's Plans
I am been told that January 14th is when Oracle will do a round of layoffs. The general expectation is that G&A functions
along with bottom 25% will receive notice. There are some group~that do not have a logical home within Oracle (like the
analytics group that I ran), so its possible that there are broader cuts in mid January. Many people are long time
\ employees who would happily take a severance package if they had a job lined up - that is easier said than done in the
j East Bay without adding a major commute.
From:

Sent:
To:
Subject:

Agassi, Shai
Wednesday, Dec 15, 2004 17:33 PM
Zepecki l John
RE: Two Peoplesoft related jtems

The topics are of very high interest!

! also need names for the top service people at PSFT. We would like to take them over (maintenance conversion).

s

from: Zepecki, John
Sent: Wednesday, December 15, 2004 8:13 PM
To: Agassi, Shai
Subject: Two Peoplesoft related items
Shai,
Dennis suggested that it would good to touch base with you on a couple of opportunities/ideas that Dennis and I
discussed briefly earlier this week. Now that Oracle has bought Peoplesoft officially, moving the PeoplesoftlJDE installed
base to SAP instead of Oracle Ebiz suite is an obvious opportunity for SAP. Second one is related to PSFT talent that will
soori be available.
Two opportunities in regards to capitalizing on the PSFT/Oracle churn to get more business for SAP. First opportunity is to
try to freeze upgrades with some HR oriented composites that integrate to previous Peoplesoft versions. These solutions
could be a vehicle to establish relationships/inroads into PSFT accounts, block Oracle's value proposition for upgrades,
. and drive revenue for SAP.

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'--:\ Second opportunity is to catch PSFT customers at the upgrade phase., Peoplesoft was rdlling out a new upgrade
.)methodology based on Ascential's ETL technology (which is not proprietary) that makes it more straightforward to create a
-- packaged upgrade from PSFT to SAP. I know a bit about Igor's work in this area. I do have some additional insight in thiS
area that might be helpful in establishing a program in this area.
I can elaborate more on either of these topics if they are of further interest, please I,et me know. In the Oracle fallout, there
will be some interesting high cc;ll,iber people will be looking for a new home (including some ex-Baali/Skillsvillage people).
If there is the ability to create some opportunities for the right talent o'r talents with certain backgrounds/expertise, _
please
let me know.
'
Thanks and regards,
Johnz

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Peoplesoft Background
Peoplesoft customers can be segmented into three major groups -Peoplesoft Enterprise
(applications based on PeopleTools technology); Peoplesoft Enterprise One (applications
based on JD Edwards' web enabled client server technology) and PeoplesoftWarid (JD
Edwards historic product that runs only on AS/400 systems and is written in RPG).
Peoplesoft Enterprise customers profile is far more similar to the typical SAP customer
profile than the typical Enterprise One or World customer. The majority of customers
shared between SAP and Peoplesoft can be expected to be Peoplesoft Enterprise
customers.
Peoplesoft Enterprise One and World are both delivered as single integrated package that
reside in one physical database, often on one single machine; The typical Enterprise One
or World customer will install an instance of the software and manage core
manufacturing, distribution, etc. business functions. Larger customers who .leverage
Enterprise One and World will typically deploy a unique software instance ateach
division or plant and leverage functionality to consolidate financial data and other shared
infonnation in one master instance.
The majority of the JD Edwards installed base (70-80%) is on the traditional World
product line. JD ,Edwards (and now Peoplesoft) has had little success in moving the
WorId installed base from the AS/400 platform and World application suite. The World
customer base in many cases is content with the level of functionality in the World
product, has heavily customized their systems in many or most cases, and'have strong
and sometimes fanatical loyalty to the AS/400 platform. World software installations
have received some Web based access in recent World software update via a partnership
with a third party ~~screen scraping" technology.
The general resistance of the WorldlAS400 base to change and the profile of this
customer base does not make this customer base that attractive as an upgrade opportunity.
JD Edwards has failed to move this customer base for years and SAP is unlikely to move
this customer group to mySAP ERP in mass numbers. The organization supporting the
World software product is relatively small (less than 50 full time resources total) and
SAP's ability to establish a critical mass of personnel or provide an attractive alternative
to Orade's supportis questionable. The World software maintenance business is
extremely profitable for Peoplesoft/Oracle.
The Peoplesoft Enterprise One installed base has similar characteristics to the Peoplesoft
World customer base. Peoplesoft Enterprise One has fewer than 1000 active customers
across of wide variety of Enterprise One software versions. A good portion of the
Peoplesoft Enterprise One installed base relies on the AS/400 platform, in many or most
cases DB2/AS400 is the database platform of choice. Like the World software installed
base, it is questionable how attractive this installed base would be to capture for upgrade
to mySAP ERP and the limited install base (which are on a wide range of versions of
Enterprise One) would make support difficult andlor expensive for SAP.

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.

\

}

A third party company named Tomorrow Now offers maintenance for all Peoplesoft
.product lines today. Tomorrow Now has been primarily focused oil Peoplesoft World and
Peoplesoft Enterprise One with Peoplesoft Enterprise added in the past year. In order to
support all Peoplesoft product lines, SAP may be able to structure an arrangement with
Tomorrow Now to subcontract maintenance of Peoplesoft Enterprise One ahdlor
Peoplesoft Wodd. SAP has a sales and marketing channel should be attractive to
Tomorrow Now, but further due diligence would b~ required to determine how capable of
a partner Tomorrow Now might be for SAP.
The Peoplesoft Enterprise software product line is comprised ofa series of independent
product suites that are linked together via near real time integration interfaces and batch
programs. Although there are many interface touch points between Peoplesoft Enterprise
product lines, most customers rely on a small number of batch interfaces (to exchange
ledger data, pass employee information, and etc.) HCM, CRM, and Financials/Supply
Chain are the major Peoplesoft domain areas.
The vast majority of Peoplesoft customers are user of the HCMsuite and/or the
Financials suite. Within Supply Chain, a small number of modules (Billing, Order
.Management, Purchasing, eProcurement) represe"nt around eighty percent of customer
installations. Peoplesoft's Enterprise Portal is shipped as separate application with
integration to the core transactional systems for user, role, and navigation/menu
information. Many customers leverage the Enterprise Portal to integrate HCM and
Financials/Supply Chain into a single view.
Peoplesoft segments the Enterprise product family based on product line and SKU. For
example, the HeM maintenance group develops support bundles and software fixes for
core HR, eBenefits, general ledger, etc. The HR suite·has around 70+ SKUs for example.
A large percentage of Peoplesoft customers use the core modules (i.e. core HR, benefits,
time and labor, general ledger, AP, AR, etc.) and these core modules represent the vast
majority of software fixes and the areas where legislative/regulatory updates are needed.
Beyond the core modules, implementation of supporting modules varies widely.
Supporting all Peoplesoft modules (many with few customers and very specific domain
expertise) would be very difficult while supporting the modules with high concentrations
of customers would be less difficult and more economical. In regards to the delivery of
software for Peoplesoft Enterprise, high priority fixes are deliyered individually and then
rolled into a bundle affixes. Bundles of software fixes are delivered to customers at six
or twelve week intervals (depending on volume of fixes). Legislative and regulatory
updates are often delivered as combination of software changes and data updates with
variance from product area to product area.
Typically the HCM and Financials/Supply Chain have been shipped every 12-15 months.
The CRM product suite has been released every 9-12 months. Peoplesoft's software
support policy is time based with four year support for releases which includes five years
of upgrades. Additional software support (include legislative and regulatory updates) has
been offered for a higher maintenance fee beyond four years. The four year support

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policy is relatively new'for Peoplesoft Enterprise and Oracle has publicly announced ten
year support for Peoplesoft products although details. of that support are unclear.HCM
has four a.ctively maintained releases and Financials/Supply Chain has three actively
maintained releases as ofQ4 2004~ Most productioncustom'ers for HCM and Fin/SCM
. are running software that was shipped in 2001 and 2002.
PeopleTools is the underlying infrastructure and runtime for Peoplesoft Enterprise
systems. PeopleTools could be best compared Netweaver/BASIS environment from
SAP. PeopleTools is updated via poirit releases at three or six month intervals with more
major point releases every two to three years. Major PeopleTools releases (i.e.
·PeopleTools 8 to PeopleTools 9) have occurred every four to six years. Priorto the
Oracle's t~keover of Peoplesoft, PeopleTools 9 (based ori IBM technology) was
tentatively planned for the 2006 timeframe and was a major re-architecture. Although
·Oracle will certainly name a PeopleTools version "9", it will almost certainly be an
incremental improvement and/or move Close to the Oracle technology stack. All actively.
.maintained PeopleTools versions are currently on six month release intervals as of Q4
2004.

to

AllPeopleTools versions are heavily reliant on BEA's Tuxedo as a core engine for the
stateless application server. Tuxedo is a mature product with relatively few changes and
updates from BEA. Peoplesoft has struggled to get BEA to add new operatipg system
platforms for theTuxedo prodnct. Peoplesoft's agreement with BEA was signed in the
mid-1990s and has very favorable tenns for Peoplesoft. Removing BEA Tuxedo from
PeopleTools is a rewrite of the majority ofthe PeopleTools infrastructure. Oracle will
have no choice but to rely on BEA's Tuxedo for along timeframe to support already
deployed PeopleTools versions.
Additionally, all Peoplesoft Enterprise customers leverage a J2EE container running
either under BEA Web logic or IBM Websphere. The vast majority (greater than 75%) of
Peoplesoft customers run BEAWeblogic. Peoplesoft's Java code is limited in
PeopleTools and does not use more advanced Java features (i.e. EJBs, newer Java APIs).
The original version of PeopleTools 8 was actually developed under Apache/Tomcat. It
should be possible to run Peoplesoffs Java infrastructure under Netweaver's J2EE stack.
Upgrading PeopleTools is not a straightforward process and Peoplesoft customers have
had negative experiences with new PeopleTools versions "breaking" their production
systems and/or causing downtime. It is not unusual for Peoplesoft customers to not stay
current onPeopleTools maintenance. The Peoplesoft upgrade typically assumes a current
version of PeopleTools. Nearly all application software updates will work with any
PeopleTools point release, so customers are not forced to upgrade the technology stack to
take application fixes and updates.
The supported PeopleTools Enterprise applications leverage either PeopleTools 8.2x
(origInally released in late 2000 with many maintenance releases) or PeopleTools 8.4x
(released in March 2001 with seven maintenance releases with most maintenance releases
delivery new enabling technology). Integration capabilities in the PeopleTools 8.2x

1

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...

)

technology are limited for non batch operations. Integration capabilities in the
PeopleTools 8Ax is fairly robust (although strong knowledge of PeopleTools is required).
Unlike the ABAPIBASIS environment, PeopleTools does a relatively poor job isolating
the developer from the nuance of various database environments. It is not unusual that a
software fix ·on one database platform may not work properly on another database
platform. This situation is particularly acute with IBM's DE/2 database on the mainframe
environment.
.The vast majority of Peoplesoft Enterprise customers use either the Oracle or SQL Server
. database platform. Additionally, there are several batch processing environments with in
PeopleTools (although all leverage the same database connectivity layer) including an
integrated batch engine called Application Engine, COBOL, and SQR (report writer
language originally developed by Brio although Peoplesoft owns the source code).
Supporting DB2/AIX or DB2/MVS is possible, but is difficult and extremely difficult
without the support of IBM.
While it is technically feasible to provide to support and software maintenance to all three
customer groups and all supported hardware and database platforms, all Peoplesoft
product lines and functional areas Within the Peoplesoft Enterprise product line are not
equally attractive. On the ability to execute and cost to execute side, limiting Peoplesoft
support to just Peoplesoft Enterprise (at least initially) and a limited number of system
landscapes (i.e. Orade, SQL Server, no mainframe operating system support) makes
sense in limiting SAP's risk and maximizing ROI.
SAP should research with its customers who run Peoplesoft which modules are in
production. SAP may get a significant ROI and limit its risk by focusing a limited set of
system landscapes and a limited set of modules (like core HR modules or core finance
modules).

Step 1 - Provide current SAP customers Peoplesoft support
Background

SAP has the opportunity to provide customer service and product maintenance for
Peoplesoft customers. Current SAP customers that use Peoplesoft for HeM or Financials
represent the most attractive customer base to target with this offering. The HCM
functional area is the most attractive area to target (high number of customers, most·
likely to need enterprise functionality). This segment of Peoplesoft customers are most
likely to migrate to mySAP ERP given their company profile and relationship with SAP.
It should be noted that most large Peoplesoft customers pay greater than 17% for
software maintenance in return for some enhanced support capability (dedicated account
representative, extended support hours). SAP may be able to price its Peoplesoft support
under more attractive terms. Aside from the uncertainty and challenges in doing business
with Oracle, most current Peoplesoft customers will be asked to undergo a license

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conversion program of som"e type to fit into Oracle's pricing module. (Oracle's pricing
model is more similar to SAP's model). Given each customer is" likely to undertaken
changes in contract and changes inserv"ice, SAP has an opportunity to pres~nt a change to
SAP as an alternative at a time When Oracle is forcing changes. Even if SAP dbes not
convert all Peoplesoft customers,SAP may force Oracle to change its behavior around
pricing or positioning.
Expertise and access to Peoplesoft systems are significant barriers to providing
Peoplesoft support. SAP would need to be established with a large SAP customer(s) or in
partnership with a systems integrator (i.e. Aecenture, ffiM) to allow SAP or its partners
to developer, test, and package software updates. It should be noted that :Peoplesoft
ramped up several hundred developers under a build operate transfer agreement with
Hexaware in Bangalore, India in the past 18 months.

SAP will need to investigate any legal issues around delivery of derivative works (in
fonn of bug corrections and legislative/tegulatory updates) with the expectation that
Oracle may legally challenges SAP's right to provide software maintenance. Given
Oracle's poor company reputation and planned headcount reductions, SAP may have an
opportunity to acquire skilled talent with product expertise.

Challenges
It
It

•
6\1

•
•

Access to Peoplesoft systems to create and deliver software fixes
Inability to patch underlying technology stack (PeopleTools) or deliver updates for
underlying infrastructure (i.e. Tuxedo updates, support for new database or operating
system versions)
Wide variety of technologies used in Peoplesoft products (i.e. Peoplecode, COBOL,
etc.)
Recruiting skilled personnel to deliver support in short time frame
Lack of consistent product architecture or design approach between functional areas
and modules
Legal challenges by Oracle

Opportunities
•
$

Ii!'

e.

Many large SAP customers are Peoplesoft HR customers with ERP 2005 usability is
less of a competitive pain for SAP
Many customers already plan to switch to SAP instead of stay with Oracle
Capture of incremental revenue stream in short term and increase SAP footprint over
time
Positive public relations - supports Safe Harbor campaign

Talent
•

Tom Shields - currently responsible for Sydney site and based in Sydney for
Peoplesoft; previous position was VP of HR group - managed the delivery of
Peoplesoft 8 HR; long time Peoplesoft employee with many years enterprise software
experience; well respected and "knows" the entire software food chain at Peoplesoft;

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is unlikely to be retained due to role and Sydney location; geographyis a problem,
but could playa startup role on contract basis
.• Catherine Jensen - current customer service VP for HCM group at Peoplesoft; held
similar role for SCM group; has experience with levell/2/3support at Peoplesoft and
global responsibility; hands on leader capable of building a call center and working
- with large customers
.. Mary June Dorsey - current customer service director of Financials and EPM groups;
very effective running a call center and knows financial product set well
lit
Hexaware Bangalore - Peoplesoft has a Build Operate Transfer (BOT) with
Hexaware in Banagalore; each Peoplesoft group has dozens to hundreds of
contractors delivering software fixes (including legislative/regulatory work) for
Peoplesoft Enterprise; unclear what Oracle will do with Hexaware's personnel whichare billed per hour today - outright purchase of the Hexaware operation might be
attractive as part of acquisition restructuring charge; Hexaware has not treated
Peoplesoft's contractors particularly well and attrition is high even by Bangalore
standards
lID
Functional knowledge experts - many Peoplesoft employees are reaching out right
now, quickly determining breadth of support and products and identifying key people
is possible; willingness to support remote employees or non U.S. based employees
could significantly help recruiting

Short Term Recommendation
.. Determine breadth and depth (Le. what modules, what product lines) SAP plans to
support initially to detennine hiring plan and approach
• Establish an office in Pleasanton, California and announce the office via a press
release and indicate job openings
• Determine organizational constraints (i.e. size, geographies, etc.) for support
organization
e
Targetlidentify a leader for the support/maintenance organization and recruit
$
Establish strategy for attracting Hexaware talent (either directly or indirectly)
Create product support strategy (including management of PeopleTools) for three
year time horizon and develop marketing plan that includes Step 2 and Step 3 of this
plan
@

Step 2 - Drive incremental revenue through composite applications
Background

Oracle has pledged to support Peoplesoft customers for ten years on current products.
Peoplesoft's standard support was for four years. Provided Oracle delivers on its ten year
support promise, Oracle will have effectively frozen the Peoplesoft installed base. As a
result, Peoplesoft customers can wait on any decision' around upgrade of their core
transactional systems.
Peoplesoft had a relatively high level of success upgrading customers to Peoplesoft 8..
Many HeM customers installed and went live with HR 8 in 2001 and 2002.

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Financials/SCM customer adoption was more staggered- Fin/SCM 8 did not support
public sector accounting requirements, Fin/SCM 8.4 released in 2002 was the first web
offering for the Education/Government sector customers.
With Peoplesoft's four year support policy, a large section of the Peoplesoft Enterprise
installed base would have been forced into an upgrade. cycle in 2005 or 2006.
Peoplesoft's customerS were resisting this upgrade cycle and it was widely assumed that
the four year support policy would be extended without incremental cost to customers at .
some point. With Oracle's extended support pledge, it can be expected that most
Peoplesoft customers will stay on their current version and wait and see what transpires
·with Oracle.
In theory, Peoplesoft customers could always buy a new module and implement this
product while in production. For example, a customer could implement Billing when
already running AP, AR, Projects, and GL. In practice, Peoplesoft customers only rarely
implemented new modules outside an upgrade cycle. Aside from customerS concerns
around risk, the implementation of a new module would often be disruptive to already
running modules (conflicting configurations, disruption of batch processes that feed GL,
etc.). Peoplesoft had some success delivering add on products· outside the core transaction
systems.
More progressive customers were much more comfortable installed a new system ~rid
integrated to the core transaction system. Peoplesoft launched an Enterprise Learning
Management package as a separately installed product that integrated base data with the
HCM core system. Within a year of release, ELM was one of the top ten products for
Peoplesoft.
Peoplesoft had launched aSarbanes Oxley solution in June 2004 that was delivered on
top of the Enterprise Portal with integration to all support Financials/SCM releases that
had significant interest from customers. Peoplesoft's Enterprise Performance
Management suite was delivered as a separately installed suite of products with
integration to all supported Peoplesoft releases via ETL maps. Each of the mentioned
products provided a mechanism for customer to buy and implement new solutions
without upgrading the core transactional systems.
With many Peoplesoft customers "frozen" on the core systems release, the only
opportunity to sell new products (other than driving an upgrade decision) will be to
deliver add on products/composite processes that integrate with shipped/deployed
Peoplesoft systems. OracIe will at some point realize that the only path to incremental
revenue is delivering composite solutions that integrate to the Peoplesoft installed base of
products.
It is unclear how soon or if Oracle will figure out this reality. Given the chum of the
acquisition and focus on stability, it would be unlikely that Oracle would give significant
attention to developing or packaging new solutions in 2005.

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This gap in new functionality without an upgrade will create provides an_opportunity for
SAP. xRPM and xPD products could be integrated into Peoplesoft HCM and Financials
to provide a solution for Peoplesoft customers. Additiomilly, SAP could develop new
composite solutions that provide functionality found in newer·Peoplesoft products (i.e.
provide performance management functionality found in HeM 8.9, provide learning
management as a solution instead of ELM, etc.). Many of the composite processes that
would be attractive to Peoplesoft customers would be attractive to SAP customers as
well.
Integrating and selling existing xApps to Peoplesoft provides SAP an immediate revenue
opportunity, particularly to customers who chose to engage with SAP for software
maintenance on their Peoplesoft systems. Developing new xApps with a Peoplesoft
installed base in mind further allows SAP to build relationships with Peoplesoft
customers, support a program to that offers· software maintenance to Peoplesoft
customers, helps to cement SAP as the obvious solution to migrate to, and drive
.
incremental revenue
Challenges
Ell
Access to Peoplesoft systems and lack of good interfaces in Peoplesoft products
Ell
Number of combinations of Peoplesoft supported systems and underlying system
landscape - difficult to test and validate all combinations
., Time to market window
.. Competition for resources with other SAP priorities
Opportunities
.. Peoplesoft customers looking for means to extend life and value of installed systems
ED
Lack of attention by Oracle
.. Synergy with other SAP composite initiatives
Use new xApps as vehicle to replace BEA Weblogic with Netweaver at the J2EE
container for PeopleTools
@

Talent
@
Ron van Grinsven - principal engineer (15 in company) in PeopleTools group; chief
architect for SkillsviHage; developer at Baan Company for many years; strong
knowledge in PeopleTools technology, Java technologies, workflow, etc.; could
easily architect integration between SAP and Peoplesoft at application and/or
technology layer
@\
Services ProcurementlSRM teams - many ex-Skillsvillage and ERP veterans (Baan,
ASK) in the SCM group; given the relatively lack of strength in SCM for Peoplesoft,
these teams are probably at high risk of being laid off or folded into Financials
organi zation
• Functional experts available in HeM areas - roadmap of solutions will help target
hiring, but acquiring solution management/domain experts is possible

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Short Term Recommendation
• Analyze list ofproposed composite solutions in SAP's 2006 planning and determine
."
attractiveness to Peoplesoft installed base
"
• Determine solutions that would be an attractive alternative to upgrading/extending
current Peoplesoft"systems
"
.
.. Build business case to fund additional personnel to integrate xPD/xRPM solution into
Peoplesoft releases with PIM message for services companies
• Synch with HeM initiative to identify target applications for Peoplesoft installed base

Step 3 -Upgrade"Peoplesoft customers to mySAP E~
Batkground

"Peoplesoft's World and Enterprise One products rely on proprietary data movement and
transformation scripts. The World and Enterprise One data models are relatively stable
over the past few years. The overall enterprise model for both systems is relatively simple
and limited in comparison to Peoplesoft Enterprise (or SAP). An upgrade from Enterprise
One.or World to SAP would require expertise on the SAP side to default SAP
. configuration and data values along with a functional expert-on the Peoplesoft Enterprise
or WorId side to match business concepts. The most straightforward mechanism for
upgrading a customer would be some type of ETL technology.
Peoplesoft's Enterprise product line has historically relied on a series of scripts (in a
variety of technologies like COBOL, SQR, shell scripts, etc.) to upgrade its customers
from version to version. The Peoplesoft upgrade has two major parts - the application
upgrade and thePeopleTools upgrade. Prior to Peoplesoft 8, the PeopleTools upgrade
was relatively painless and was a copy of new binary files to a directory in many cases.
The application upgrade difficulty was verydependetit on the amount a customer
changed the delivered Peoplesoft product and whether the customer stayed current on
software maintenance.
The rate of change in the application was varied - release to release might have limited
change for some products or quite dramatic changes in other cases. If a customer
"skipped" an upgrade (for example, a customer"went from version 8 to version 8.8
without every implementing a version 8.4), the complexity and difficulty of the
application update would go up significantly. PeopleTools' lack of a versioning system
does nbt make it easy to easily identify customer changes versus change due to software
maintenance. The more the customer changed the base software and the further behind on
software maintenance a customer was, the more difficult the upgrade would be.
When a system was upgraded, the installation was upgraded "in place". "In place" means
that a version of PeopleTools (i.e. version 8.14) would be upgraded to a new version and
then the application version (i.e. HR 8) would be upgraded to a new version. Only
database tables that were changed were modified at all, new meta-data was introduced for
the system level, and supporting binaries were updated. For large customers with core
tables that contained millions of rows, this approach to upgrade would help limit the

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" "upgrade window as ;many tables would remain" static from release to release. The
requirement to not disturb tables with high data volumes would often limit what software
.changes and enhancements could be done in a particular release. "
With the introductionof the HTML interface in PeopleTools 8, the PeopleToois upgrade
"became far more complicated, difficult, and time consuming. PeopleTools 8+ releases
contained far more Peoplecode based components where in"pre-PeopleTools 8 versions
most code was delivered as binaries. Many PeopleTools 8 point/maintenance releases
disrupted customer environments or upgrades were very difficult and time/resource
consuming. As a result, many Peoplesoft customers fell behind in upgrading PeopleTools
on their production systems.
Making things more difficult, the application upgrade usually required a customer to be
current on the latest version of PeopleTools before starting the application upgrad~.In
order toupgrade from Peoplesoft HR 8 to Peoplesoft HR 8.8, a custoI1lermight have to
upgrade the PeopleTools version several times (Le. PeopleTools 8.14 to PeopleTools 8.15
to PeopleTools 8.16 then to PeopleTools 8.41) before even being able to start the
application upgrade.
The application upgrade relied on batch program in different programming languages
which were built over time (i.e. the upgrade froin PSFT HR 7.5 to PSFT 8 was modified
to support an upgrade from PSFT 7.5 to PSFT 8.3) and many upgrade programs were
cumbersome and error prone. Although Peoplesoft had significant success in upgrading
"its customers to Peoplesoft 8, difficulty of upgrade was a continual customer complaint.
With each upgrade to Peoplesoft 8, Peoplesoft typically sold 3-4 new modules so making
upgrade smoother was a top priority issue because upgrade helped drive new license
sales.
Several projects were started to simplify upgrade and deal with upgrade related issues
(i.e. time, quality, stabilization issues, etc.). There were several failed attempts and a
handful of incremental improvements in 2001 and 2002. A big issue around these
attempts was Lack of technology to effectively move data at high speed across database
platforms with an easy to use development tool and lack of cooperation from various
groups. The inability to perform distributed database operations (i.e. read for system A
and write to system B) is due to a lack of functionality in PeopleTools' database layer and
the lack of a strong isolation from the database nuances in PeopleTools (i.e. even if
distributed operation was possible it would be hard to write SQL so that conversion
between database types would bepossible).
In December 2003, Peoplesoft entered into an agreement with Ascential Software to
leverage Ascential's DataStage ETL technology for its Enterprise Performance
Management suite. In this agreement, Peoplesoft received a limited license to use
DataStage ETL for the purposes of upgrading a Peoplesoft system (any Peoplesoft
product family) to one version to the next version. Ascential's DataStage would be
available to be shipped to every Peoplesoft customer for this purpose with EPM
customers receiving a broader use license.

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After a series of pilot projects with DataStage~ a decision was made to use DataStage as
the techJ.lology for Peoplesoft's upgrade. A decision was made not to upgrade
.
PeopleTools with DataStage (at least not initially although it was planned at a later
phase). At the same time~ the methodology-for upgrade was changed.
Instead of upgrading -an existing system "in place", a customer would install the new
version of Peoplesoft software and then "migrate;' the data from the old version of
software. The customer would compare any customizations from their production version
of software to the new version and re-implement any customizations that were still
required.
Peoplesoft's HeM 8.9 release in Q4 04 was the first release to leverage, DataStage for the
application upgrade. The HeM 8.9 release delivered its upgrade scripts in phases with all
scripts being delivered by end ofQl 05. Subsequent Peoplesoft releases (EPM in Ql 05,
Enterprise Portal in Q2 05, etc.) were planned to use DataStage as well.

All ETL maps created for the HeM 8.9 upgrade were newly created. Because DataStage
is leveraged for data warehousing, produces SQL, has export capabilities, etc. it is far·
easier to understand what happens during the upgrade scripts than in the past. Many of
the ETL maps were built by Hexaware in Bangalore. A feasibility study was done to
convert existing scripts to DataStage ETL maps, but this project was dropped after an
investigation revealed that the return on investment was low due to the mismatch of
technology and the existing upgrade scripts were often overly complex and/or poorly
constructed.
At the same time that Peoplesoft was shifting upgrade to DataStage and rebuilding all
upgrade scripts, the Enterprise Performance Management team was building ETL maps
from every supported Peoplesoft release (including Enterprise One and W orId) to EPM
8.9. (EPM 8.9 was scheduled to ship in Q1 2005, it is unclear if or when this release will
actually ship with Oracle's takeover.) In EPM 8.9, all Peoplesoft data models are
rationalized and normalized in a series of data marts.
The EPM data modeling team has extensive knowledge of Peoples oft's data models (both
Peoplesoft Enterprise, Enterprise One, and World). This knowledge of data models would
be required for any mapping of Peoplesoft's data to an SAP system. Knowledge of core
architecture tenants of the Peoplesoft{Business Unit, SETID, financial ledger structures,
etc.) would be critical for mapping business concepts. The EPM application team has
skilled personnel on these topic areas.
Peoplesoft's shift in upgrade approach presents an opportunity for SAP. All Peoplesoft
customers will effectively have to re-implement/reinstall when upgrading. Oracle is
likely to strongly push customer to upgrade to Oracle eBizSuite instead of a newer
version of Peoplesoft. Regardless, a customer will be asked to do something new and is
likely to perceive it as a good opportunity to change or may be more open to a change to
SAP.

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With Peoplesoft'sproprietary upgrade, it would have been more difficultto offer an easy
path to mySAP ERP. With the change to use DataStage it is much more possible to
change Peoplesoft's delivered ETL maps to map data to a mySAP ERP target. This effort
. would require a license from Ascential and would require analysis and engineering to
"
effective map to the mySAP ERP target.
The analysis effort would require capable functional experts on both the Peoplesoft side
and SAP side, but the actual creation of ETL maps could be done in a low cost country
and even outsourced. Even if Oracle decides to stop using Ascential, SAP could create
ETL maps using a similar approach for upgrade. Most ETL maps are simple in nature
and could be developed in a low cost country.
Challenges
• Oracle may decide to stop using Ascential for upgrade, its unclear whether Oracle
will react fast enough or the delay caused by a change would be acceptable to Oracle
- this change could make development more difficult and costly
" The Ascential based upgrade is new and only the initial HeM 8.9 path~ have been
released - Ascential based upgrades may no longer be developed at all
• SAP would need application expertise on both SAP a.ndPeoplesoft products to create
"maps
.. SAP would needaccess to both Peoplesoft systems and Peoplesoft upgrade ETL
maps
• Permutations and combinations of system landscapes makes validation of an end to
end solutions
1&
Access to Peoplesoft systems would need to be obtained

Opportunities
s
Peoplesoft's EPM Enterprise Warehouse team has significant experience with
Peoplesoft's data models and Ascential's DataStage
.. Hexaware personnel may be directly or indirectly available to aid an SAP effort
Cognizant Technologies in India has several hundred trained Ascential experts
available in the $22-$25/hour range for work done in India
• Congizant Technologies is a Peoplesoft customer and could be a model for Peoplesoft
to SAP upgrade
e
Ascential is already an SAP OEM partner and Ascential's future with Oracle is not
bright - Ascential is likely to want to work with SAP
@

Talent
Sai Kalur - responsible for the Peoplesoft HeM group's upgrade and delivered pilot
projects on Ascential DataStage
IilI
Nathan Christensen - architect for Financials product line upgrade; has very deep
knowledge of Peoplesoft's upgrade; in the event Ascential's DataStage is dropped as
an upgrade technology, Nate could has expertise to delivery alternative methods to
support upgrade to SAP
1&

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.

"

",

•

•

Naghi Prasad - director of enterprise warehouse development for EPM; joined
Peoplesoft from Oracle; responsible for building several thousand ETL maps for
EPM product suite
Alan Bouris - program manager for EPM product suite; capable of helping to define
and driving execution of-a hirge scale project

Short Term Recommendation
Based on plan for software. support,create a plan for upgrade that is complimentary
e Hire leaders to establish a program for Peoplesoft to my SAP ERP upgrade
$
Recruit core data model team to driving mapping process from Peoplesoft to SAP
@

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