Oracle breaks staff vow

Larry Ellison's promise that Oracle would over-support PeopleSoft customers had a hollow ring yesterday after his company sacked 15 of PeopleSoft New Zealand's 50 staff, days after completing a US$10.3 billion ($14.7 billion) hostile takeover.

There was a similar cleanout across the Tasman and, around the world, up to 6000 of PeopleSoft's 11,000 staff will not be turning up to work on Monday.

Oracle refused to comment on the lay-offs yesterday and PeopleSoft New Zealand manager Andrew Batchelor, who was offered a job in Australia with Oracle, also stayed mum.

Oracle had made it clear it was only interested in retaining billable staff such as those in technical support.

PeopleSoft had about 140 sites in New Zealand, 85 of them picked up in the 2003 merger with JD Edwards.

New Zealand Dairy Foods chief information officer Peter Scott said his company replaced an Oracle system with JD Edwards four years ago and was not looking forward to relying on Oracle for support again.

Saying that four years ago the support was poor, Scott said: "Their usual answer was load the latest version, which isn't practical. We will be looking for ways to reduce our payments to Oracle."

Dairy Foods had several major projects planned for which it needed help from the software vendor or from implementers like Fusion 5 which had built up PeopleSoft skills.

Oracle is mainly known for its database technology, which companies use to manage their information. Its sales of applications, the systems organisations use to run their accounting, payroll, distribution and other functions, have run a distant third to PeopleSoft and market leader SAP.

Although a clear aim of the takeover was to get PeopleSoft's installed base switched to the Oracle database and other infrastructure, Scott said that was not an option for Dairy Foods. "We are running on Microsoft's SQL Server database and we have changed the skill sets of our people to be Microsoft-centric.

"We have a stable system, so going to Oracle would be a huge shift."

Auckland University chief information officer Stephen Whiteside said its PeopleSoft systems ran on an Oracle database, so it already had a relationship with the vendor.

"The issue for us is the calibre of the support staff. We get support for our student administration system out of the United States because it is a niche application so you look to people with niche skills," he said.

Human resources, payroll, finance and portal are more common applications so the skills are more readily available.

The university has spent more than $70 million on its systems during the past five years.

Other major PeopleSoft customers include Air New Zealand, Manukau City Council and Sky City.

If Oracle does not win the support of PeopleSoft customers, particularly those signed in the past nine months, it could face extra merger expenses.

PeopleSoft sales contracts signed last year allow customers to get their money back and more if support levels drop under new management.

Oracle will spell out its plans at a customer event on Tuesday.