AGCO experiences JDE acquisition firsthand

To Howard Love, news of the J.D. Edwards acquisition by PeopleSoft was less than welcome. "I've been involved before when companies were acquired and things changed, and I was terrified," says the IT Manager at farm equipment manufacturer AGCO, Duluth, Ga.

"A few years back a vendor we were dealing with was taken over and right away we got e-mails saying that our software would no longer be supported. We were told we needed to buy a migration tool and were given contact information for a consulting group that we had to use to do the upgrade. At the time we weren't part of AGCO and didn't have the money to do this, so we had to run an unsupported system."

This time around Love was particularly concerned because AGCO had just committed to standardizing all of its global manufacturing facilities on J.D. Edwards technology—a massive project involving factories in Europe, South America, and the U.S.

According to Jim Sheppard, a VP with Boston-based AMR Research, Love's past experience was not an uncommon practice for mergers and acquisitions in the 1980s and early 1990s, but things have changed since then. "There was a time when vendors believed they could migrate new customers, but it doesn't actually work. There is no business reason for the customer to migrate to a new product. They aren't going to change just because a vendor wants them to.

"Today the acquiring company always wants to maintain support and revenue streams from the existing customer base. In many cases they will even enhance the existing product family."

According to Sheppard, the most important thing customers can do is relax. "People tend to overreact, imagining all sorts of dire consequences."

As for the vendors, they need to provide constant reassurance that they are going to maintain support for existing products. "They need to go way overboard and commit in writing to long-term support. The customer base is by and large the most valuable thing," says Sheppard.

In contrast to his past experience, in the aftermath of the acquisition of J.D. Edwards, Love is happy with the way PeopleSoft handled things. "It's been extremely smooth," he says, adding that many of the consultants he worked with at J.D. Edwards are still involved, providing needed continuity. PeopleSoft also is supporting all the J.D. Edwards products that are relevant to AGCO.