Microsoft didn't waste any time in trying to win over ERP customers who might be unhappy with Oracle's recent purchase of PeopleSoft.

On the heels of the announcement of the Oracle-PeopleSoft merger, Microsoft attempted to swoop in. On December 15, the head of Microsoft's sales and marketing for North America, corporate vice president Bill Veghte, sent an open e-mail letter to PeopleSoft customers, inviting them to consider Microsoft's ERP products as alternatives.

The letter, a copy of which was viewed by Microsoft Watch, emphasized Microsoft's claim that the Windows/SQL Server platform offers users better total cost of ownership than does the Unix/Oracle one.

"The Microsoft platform has emerged as the platform of choice for ERP applications deployed in enterprise environments and the reasons for this are crystal clear: customers that deploy business applications on Microsoft Windows Server and Microsoft SQL Server enjoy lower costs, lower complexity, better manageability, greater productivity, and richer options to extend application functionality and extract value," Veghte wrote in his open letter.

Veghte emphasized that PeopleSoft customers don't have to stick with their current Oracle/PeopleSoft set-up. Instead, they might opt to their current PeopleSoft applications by continuing with the Windows Server/SQL Server/.Net platform. They could choose to "replatform" their Unix-, AS/400- and mainframe-based PeopleSoft solutions on Windows Server. Or they could decide to migrate completely off PeopleSoft to one of the Microsoft Business Solutions packages (Axapta, Navision or Great Plains), or even to another Microsoft partner's ERP solutions, such as one from SAP.

Microsoft has been working actively throughout 2004 to block the Oracle PeopleSoft merger and testified during the government examination of the pending merger that the acquisition would not be in consumers' best interests.

Now that the deal has been approved and has occurred, will Microsoft's new tactic have any negative impact on Oracle?

"I don't expect Microsoft's tantalizing email will drum up much business," said Brian Nordberg, a database administrator in Salt Lake City, Utah. (Nordberg asked that his company name not be revealed.) "Most companies that have invested the millions it takes to adapt and customize PeopleSoft aren't going to want to change their direction. It's not as though PeopleSoft has been sold to a mom-and-pop shop that may close and leave you stranded.

"However for those in mid-course of a PeopleSoft rollout, that are starting to wonder if mounting consulting and internal IT costs are justified, the uncertainty caused by the takeover may push some to the Microsoft side," Nordberg acknowledged.

Steve Tenant, a software industry-marketing consultant (and founder of the PeopleSoft Alumni Network of former PeopleSoft employees), noted that Microsoft's approach could disrupt the PeopleSoft/Oracle sales cycle.

Letters like Veghte's attract "the attention of prospective customers in different ways depending on where they are in the buying cycle," Tenant said. " Early on, if a customer is finalizing a short list of vendors being considered to solve a problem, they might reevaluate and include Microsoft. In later stages, it could delay a decision for PeopleSoft and open the door for Microsoft or other players. In short, in a world where a 2.5 percent to 3 perecent response rate on a letter is considered a success, the tactic works. Plus, there's little downside for trying."

In a related, but separate, move, Microsoft announced on Monday the formation of the Midrange Alliance Program, a group focused on convincing IBM iSeries customers to migrate to Windows.
The Midrange Alliance is set to launch its official Web site in early 2005. Members of the alliance, in addition to Microsoft, include ASNA, BORN, Covansys, Fujitsu, Geniant, HCL and LANSA.