It looks like oracle/peoplesoft is a done deal. But why would Larry Ellison spend $10.3 billion for overlapping technology? For me, the answer comes in two parts. In the short term, Oracle wants PeopleSoft's customer-support business. Trolling for new licensees is expensive, but servicing current users is a high-margin endeavor. If you talk to Josh Greenbaum, an analyst at Enterprise Applications Consultants, he'll tell you support' of PeopleSoft." In other words, migration services. Siddiqui believes third parties will also offer support services for unsupported PeopleSoft applications. "You can almost think of mini-replicas of PeopleSoft being formed in the next two or three years by PeopleSoft junkies." Support is one thing, but what Oracle has not promised is to continue R&D for PeopleSoft products beyond the next release. So although all the Oracle needed this acquisition badly. Almost all of the application vendors get one-third of their revenue from maintenance, one-third from service, and one-third from new licenses, Greenbaum says, adding, "The real money is in the installed base, and you need that critical mass to keep that rolling."
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