Hungry for maintenance revenue, Oracle Corporation chairman and CFO Jeff Henley has stated the vendor will keep PeopleSoft's controversial licensing system for the foreseeable future, but also left the door open for aggrieved customers to negotiate a better deal.
Unlike many applications vendors which charge on a per seat or per processor basis, PeopleSoft's licensing is charged to clients a percentage of their gross revenue allowing it to grow its profits as its clients expanded.
Conceding PeopleSoft's charging regime was unusual, Henley said his intention "for now is to continue to offer the customer what they are used to".
"I'm sure over time we may give them some other alternative...but for now we are certainly not going to try and change what [customers] are used to. To the extent that there is an alternative model that we need to come up with, we are happy to do that. Our goal is to try to understand, first, the way PeopleSoft do business and not pull the rug out from under people," Henley said.
Other customer relationship changes flagged by Henley include extending Oracle's model of a single maintenance fee to cover future upgrades, noting that PeopleSoft had previously charged an additional fee to upgrade to current its R8 suite of applications.
Henley said he while remained confident Oracle's new service oriented architecture (dubbed Fusion) that will incorporate PeopleSoft's applications would present a compelling value proposition and grow market share, some customer turnover was inevitable.
He said this would be driven by clients of both firms consolidating through mergers and acquisitions and accordingly looking to rationalize on a single applications platform.
"We think that we will lose some customers. Customers that are very heavy SAP shops, but for HR, would be the likely cases where we would see some movement," Henely said.
Notwithstanding this, Henely said Oracle also expected to more than make up any difference in custom as clients with older legacy applications prepared to move to newer technologies.