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PeopleSoft switches from Informatica to Ascential

Don't customers have enough on their plate, already?

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Until last week, PeopleSoft had a five-year agreement during which it shipped Informatica's low-end PowerMart ETL (extract, transform and load) technology as a part of a number of its products, most notably Enterprise Performance Management (EPM),writes Bloor Research analyst Philip Howard. Coincidentally, Informatica had a similar (two-year) agreement with JD Edwards. Now PeopleSoft has announced that it is switching its ETL supplier for both product sets, and opting for Ascential's product suite instead.

Now, you can argue about the relative merits of Ascential and Informatica. Depending on what sort of features and functions you regard as most important, you might choose either one, depending on the circumstances. In its press releases and statements reported in the press it is suggested that Ascential is closer to PeopleSoft's vision, particularly with respect to EAI (enterprise application integration). This is presumably a reference to Ascential's recent acquisition of Mercator. However, if that is the case, then this argument doesn't stack up: Ascential is at pains to point out that it is not moving into the EAI space and that its purchase of Mercator is about extending its data integration facilities and not about EAI.

As one might expect, with their current agreement due to expire at the end of last year, Informatica and PeopleSoft were in negotiations about its renewal for some months prior to this date. According to my sources at Informatica, PeopleSoft wanted to replace the current agreement with one that provided PowerCenter instead of PowerMart, and they wanted more flexible licensing arrangements. This would have effectively meant that any user of EPM would not only have PowerCenter bundled into the product, but would be able to extend their use of PowerCenter to other application areas as well, without further charge. Thus Informatica stood to make no additional revenues except for additional connectors and so forth.

Informatica was negotiating on this basis and, as far as it was concerned, this was a reasonable agreement provided the financial terms were satisfactory. Then Ascential, according to Ron Papa, senior VP of Business Development at Informatica, came in with an offer that PeopleSoft could not refuse and Informatica declined to match it, because it felt that the terms were not commercially viable. Perhaps most tellingly, there were no technical discussions: PeopleSoft never came to look at the new features of PowerCenter 7, which strongly suggests that this was indeed purely a price-based decision.

The upshot of all this is that PeopleSoft should be able to offer more functionality (which it would have had, if in somewhat different ways, with PowerCenter 7 anyway) at a lower price. No doubt it hopes that this will help it attract more customers to EPM.

But what about existing customers? Suppose customers want to continue to use PowerMart - who will support it? PeopleSoft? How? In fact it is likely that Informatica will make these users an offer for support and maintenance. And my guess is that it will be very aggressively priced. So we can expect a large rump of users to continue to use PowerMart. Besides, many of them are corporate users of Informatica in a much wider context, and these companies will certainly not want to migrate to Ascential.

And how about those customers that PeopleSoft persuades to migrate? There is talk about free consulting and testing. It has even been suggested that users can simply ship their transformation models off to PeopleSoft/Ascential and wait for converted models to be returned to them, which they can simply plug into Ascential DataStage and go. Oh really? What tree have you been living in?

Now, that is the direction that Informatica, at least, is moving in - de-coupling the models from the engine - which potentially opens the door to having standards for transformation models, but that day has not yet dawned. In the meantime, it is not a trivial exercise to move models like this. My advice to anyone in this position would be to proceed extremely cautiously: wait until lots of other people have done it first. Indeed, unless there was a compelling reason otherwise, I probably wouldn't recommend moving at all.

I have to say that I am surprised at this decision by PeopleSoft. I don't necessarily blame it for choosing Ascential - it has a good product set that is a serious competitor to Informatica - but surely, PeopleSoft's user community has enough on its plate already. With the acquisition of JD Edwards only just completed and Oracle still making a huge nuisance of itself, the last thing that PeopeSoft's customer base needs is another cause of upheaval.

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