Real estate firm signs SAP Safe Passage deal

By Robert Westervelt, News Editor 24 Oct 2005 | SearchSAP.com

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Forrest City Enterprises is migrating through SAP's Safe Passage program, attracted partly through the program's mixture of license credits and implementation services.

The program was launched in January to attract PeopleSoft customers after Oracle Corp. was given approval to acquire the software vendor. The program was extended this week to include Siebel Systems customers, and is also open to J.D. Edwards (JDE), Retek and small and midsized businesses. Oracle followed with a similar program it calls OffSAP.

For more information Get complete coverage of the Oracle-Siebel deal Catch up on SAP's latest CRM release

While both Oracle and SAP have been trumpeting the success of their programs, SAP's Michael Wendell, a vice president who serves as director of the Safe Passage program, said at the very least it has opened a dialogue with prospective customers.

"Nobody is going to rip out something that works and replace it with SAP merely because we're giving them a credit on a past investment," Wendell said.

Forrest City executives brought the company's JDE implementation to a halt after Oracle was given the nod by federal regulators to acquire JDE. Forrest City was looking for a long-term investment and wanted a stable product, so it began investigating SAP as an alternative, Wendell said.

IT executives at Forrest City could not be reached for comment.

"Ultimately, the only way we win these opportunities is by providing a better solution for their needs today or a more predictable and better solution in the future," Wendell said.

SAP gives a credit of up to 75% of the original software license fees against the licensing of comparable products from SAP. An assessment and execution plan to conduct an implementation product is also provided, as well as conversion tools and services from SAP. Management of existing PeopleSoft applications would be provided by SAP's recently acquired subsidiary TomorrowNow. End-user training and project team education are also included.

Companies that are considering either Oracle or SAP have had the most bargaining power, as the competition is driving costs down, according to analysts. But on licensing costs alone, Wendell said, Oracle beats SAP.

"We know that Oracle is compensating their account executives to drive the costs down," Wendell said. "Oracle will give 100% credit of SAP software, and we just don't think our product is something we want to give away for free."

Of the 30 customers that SAP has signed licensing agreements with through Safe Passage, more than 20 are moving directly to SAP without using maintenance services from TomorrowNow, Wendell said. About two customers are shelving the SAP license, with plans to migrate in the future, and several others are taking a slower migration path, choosing TomorrowNow to maintain existing PeopleSoft and JDE applications while migrating other systems to SAP, he said.

Oracle's OffSAP program

Oracle said it has gained 1,000 sales leads as a result of its program. However, Oracle's Fred Studer, vice president of applications marketing, has been unable to highlight a single company that has chosen to migrate off of SAP.

"We're having conversations, and those conversations are going well," Studer said, in a recent interview with SearchSAP.com. "Anytime we get interest in a very short period of time means that we've hit a hot button."

Oracle's program offers up to a 100% license credit for SAP R/3 customers that switch from SAP to Oracle applications. The program also includes an assessment from Oracle Consulting, a service arm of Oracle that provides a roadmap for migrating from SAP to Oracle. A two-year payment plan for the software license and support fees with no interest and no payments for six months is also offered under the program.

"We'll show them how this process is mapped," Studer said "We understand that SAP customers are really looking for lower cost of ownership and an easier, less complex way of integrating systems together."

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