First reactions to Larry Ellison's Friday Firecracker

Larry Ellison's Friday firecracker didn't catch analysts on the hop – most have been singing the industry consolidation song for some time. It's just that they didn't expect it so soon.

Analyst Martin Atherton of Datamonitor said: "Just as the application software market was in danger of getting boring, it goes ballistic with several major announcements."

Industry consolidation is here and it is a fact. That is one thing that all the analysts are agreed on.

David Bradshaw at Ovum said: "The industry, it's just three mega-players - SAP, Oracle and Microsoft, which is emerging at the bottom. The bottom is fragmented but Microsoft is on its way."

"Oracle is just wiping out the opposition," said the Butler Group's Mike Thompson. "It's continuing to support PeopleSoft 7 – longer than PeopleSoft said it would. But it has no plans to sell it and no plans to integrate it.

"If there's good technology, they'll pinch it. It's just a wipe-out."

Atherton pointed out: "It demonstrates that Oracle is not ready to sit and watch IBM's platform and IBM's database pervade a significant chunk of the market without IBM raising a finger.

"It has its own version of the future – one that runs on Oracle's application server, supported by the Oracle database. If Oracle gets to own the installed base of PeopleSoft and JD Edwards, we can be sure of some interesting time ahead.

So much for the industry. Customers will have to be very alert.

"This just reduces end-user choice – and that is not a good thing. The people who really have to worry are those who have JD Edwards installed. It was implicit in the PeopleSoft bid that JD Edwards felt that it couldn't compete. Its survival now looks doubtful," said Butler's Thompson.

Bradshaw's sympathies at Ovum are with the users of PeopleSoft 8. "If you have 8 or are in the middle of installing it, you've just lost another option. And you know that you're going to face another migration soon – with less choice.

"People with 7 are neutral. Their support term is extended but their options at the end of that are reduced."

And he feels that it will be some time before Microsoft moves up from the bottom of the market. "Its got Great Plains and Navision to rewrite, combine and stabilise. That will take at least two years – more likely five.

"The magic number there to look at will be version 3.1. That's how long it took before Windows was worth buying."

Datamonitor's Atherton summed up: "For all the industry talk of openness and choice, there is rather less of it for the user."