Oracle users waiting on support decision

By Alorie Gilbert

Oracle intends to focus on its latest software at its upcoming AppsWorld conference but many customers are hoping the database giant will spend some time explaining its plans for supporting an aging product.

Oracle plans to discontinue technical support and maintenance in June for version 10.7 of its business applications, a set of software programs that can touch nearly every corner of a company's operations, from order taking and inventory to bookkeeping and human resources.

Software companies routinely discontinue support for old products, requiring clients to upgrade or go without support. And Oracle has defended its decision by noting it has supported 10.7 for seven years, far longer than most other companies support their software.

Nevertheless, the deadline has drawn criticism because of a confluence of three unusual circumstances: initial problems with the new software, a weakened economy that has crimped IT budgets and the complexity of upgrading to the newer 11i.

Many companies initially shunned the latest version because of reports of bugs and other implementation problems. Oracle didn't offer a reasonably stable version until late last year, say some customers and others familiar with the product.

Of Oracle's 13,000 business applications customers, 2,600 were still running version 10.7 as of early December, according to an Oracle representative. Nearly half of the 10.7 users are in the midst of upgrading to 11i, and it's likely that many completed their upgrades over the holidays, she said.

On behalf of the potentially hundreds of companies that don't migrate to 11i before Oracle pulls the plug on 10.7 support, the Oracle Applications User Group (OAUG) is lobbying Oracle to keep up basic service for the older version, such as making online documentation and bug patches available for another year or two. The group is an independent association of Oracle applications customers with more than 2,000 members.

Members of the group also plan to provide technical support for each other until they move to 11i on their own time frame, not the one mandated by Oracle.

The OAUG presented its requests to Oracle more than two months ago but Oracle has yet to respond. Though Oracle and the OAUG are arranging to meet at AppsWorld, which starts on 19 January in San Diego, Oracle has not promised it will provide any answers by then.

"We're still going through the requests," said Oracle spokeswoman Karen Tillman. "We're considering what's feasible for Oracle to maintain and how many people are going to be affected."

Tillman said she doesn't know when Oracle will have answers for the OAUG.

The OAUG recently created a special section of its website to keep companies updated on Oracle's decisions and other developments. With less than six months to go, many members are anxiously awaiting Oracle's response to their questions, such as how much Oracle will charge them for limited 10.7 support if the option becomes available, said Pat Dues, chair of the OAUG customer support council and an IT project officer for the city of Las Vegas.

"We have a lot of unanswered questions," said Dues. "We're hoping we hear something from Oracle very soon."

It's standard practice for software companies to discontinue support for products several years after introducing them. Often, software companies hope to grow service revenue through a mass upgrade to a popular product, or cut their internal costs by discontinuing labour-intensive support for an older version.

And Oracle isn't the only major business applications company discontinuing support for a popular version of its software this year. SAP, an Oracle rival, is discontinuing standard support for four different versions of its flagship R/3 software in December. PeopleSoft is discontinuing standard support for several versions of its human resource management and student administration applications this spring and summer.

Customers reluctant to invest millions of dollars in new hardware and services that it typically requires to upgrade their business applications may be saddled instead with higher costs for extended maintenance contracts. For example, SAP tacks on an additional 2 per cent to the price of an annual maintenance contract for extended support on out-of-date versions of its software.

"As vendors continue to seek ways to protect and increase revenue - in a market where many users are standing pat with existing installations - increases in maintenance costs are an attractive, short-term solution," IT research firm Gartner stated in a recently published report.

At AppsWorld, Oracle also will likely face tough questions about the steep decline of its business applications sales over the last year and how the company plans to revive them.

In Oracle's second quarter, ended 30 November, sales of new applications licences in the Americas plummeted 50 per cent from the same period a year ago. Oracle executives have long touted applications as a critical source of future growth for the company.

Alorie Gilbert writes for CNET News.com.