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JD Edwards

J.D. Edwards World Solution Company or JD Edwards, abbreviated JDE, was a computer software company founded March 1977 in Denver, Colorado by Jack Thompson, C.T.P. “Chuck” Hintze, Dan Gregory, and Ed McVaney. The company made its name building three generations of Enterprise Resource Planning (ERP) software including World for IBM AS/400 minicomputers (the users using a computer terminal or terminal emulator), OneWorld for CNC architecture (a client–server fat client), and JD Edwards EnterpriseOne (a web-based thin client).

JD Edwards was purchased by PeopleSoft, Inc. in 2003. PeopleSoft, in turn, was purchased by Oracle Corporation in 2005. Oracle Corp. continues to sell and support the JD Edwards EnterpriseOne [1] and World [2] ERP software line.

JD Edwards and the Ed McVaney story

Ed McVaney was originally trained as an engineer at the University of Nebraska. Upon finishing his MBA from Rutgers and taking a job with Western Electric in mid-1964 working applied mathematics schemes theory, McVaney first came into contact with computers used for operations research using mathematical modeling programs. Self-taught in machine language but discouraged by computer and software limitations, McVaney took a position with Peat Marwick in New York City in 1964. From NYC he was transferred to Denver, Colorado in 1968. He continued with Marwick until 1970 when he took a position with Alexander Grant, which subsequently became Grant Thornton. While at Grant Thornton, McVaney met John Thompson, who was working on an IBM 1130 in Billings, Montana making $630 a month. Thompson was lured to Grant Thornton for $750 a month, bringing him to Denver. At this time McVaney also met Dan Gregory, a college MBA student from University of Denver. McVaney hired Gregory out of the MBA program at Denver University. McVaney describes that time as a period in which he was developing his personal concept of integrity from a “high school level” to a much more mature business-related notion of absolute reliability. At the same time he was coming to the realization that, in his words, “The culture of a public accounting firm is the antithesis of developing software. The idea of spending time on something that you’re not getting paid for—software development—I just could not stomach that.”[3] This indicated to McVaney that accounting clients did not understand what was required for software development. After what McVaney described as a consulting “failure” at a client, Haviland Whitcon Company, in San Jose, California, McVaney came to the conclusion that he had to start his own firm to implement his own approach to accounting business software development. McVaney had been discussing starting his own firm with both his wife as well as Thompson and Gregory. Now it was time to make the move, telling his wife, “I think it’s time for me to start my own company. Look, I don’t really fit in here. The culture isn’t right. I want to get some things done. I’d like to start my own company.” Soon he would have his chance.

JD Edwards is born

In 1977, unsatisfied with conventional approaches to business software development and accounting software services, McVaney started JD Edwards by selling co-workers, Dan Gregory and Jack Thompson, on his concept. He envisioned a radically different approach to accounting software development, one that represented a significant cultural shift from typical sales promises to total commitment to the customer’s goals, based on an integrity-based approach to customer requirements. After discarding the name Jack Daniels & Co., the group decided that the name JD Edwards sounded better (“J” for Jack, “D” for Dan, and “Edwards” for “Ed”). In order to get an $8,000 loan, McVaney took a salary cut from $44,000 to $36,000 and in order to live on that salary, all optional family expenses such as piano lessons, skiing, and swimming lessons were spared.

 Initial clients

Start-up clients included McCoy Sales in Denver, Colorado, a then $4-million wholesale distribution company and Cincinnati Milacron Company, a maker of machine tools. McVaney and his team received a $75,000 contract to write software to develop a wholesale distribution system. The new company also got a $50,000 contract with the Colorado Highway Department to develop a governmental accounting, construction cost accounting system. McVaney’s first international client was Shell Oil Company in Cameroon, Africa. Co-founder Dan Gregory flew to Shell Oil, himself to install the company’s first international, multi-national, multi-currency client software system.

Enterprise Resource Planning concept developed

As the vast majority of JD Edwards’s customers were medium-sized companies, clients did not have the luxury of gigantic accounting software implementations. There was a basic business need for all accounting to be tightly integrated. As McVaney would explain in 2002, integrated systems were created precisely because “you can’t go into a moderate-sized company and just put in a payroll. You have to put in a payroll and job cost, general ledger, inventory, fixed assets and the whole thing. SAP had the same advantage that JD Edwards had because we worked on smaller companies, we were forced to see the whole broad picture.”[4] It was this requirement for both JDE clients in the USA and Europe as well as their European competitor SAP, whose typical clients were much smaller than the American fortune 500 firms. McVaney and his company developed what would be called Enterprise Resource Planning, or ERP, software in response to that business requirement.

World ERP System launched

The software was called JD Edwards WorldSoftware, popularly called World. Development began with the System/34 and /36, focusing from the mid 1980s on System/38 minicomputers, then switching to the AS/400 when it became available. The company initially focused on developing the accounting software needed by their clients. World was server-centric; the users would operate an IBM computer terminal or “green-screen”. (Later, users would run terminal emulator software on their personal computers).

Three roles in JD Edwards ERP

As an ERP system, JD Edwards comprises three basic areas of expertise: functional/business analyst, programmer/software developer, and CNC/system administration.

Functional/business analyst

A JDE business analyst is an expert on one or more of the JDE modules, financials, manufacturing, operations, transportation, sales and other areas. This person is the business subject matter expert. Often they started as a JDE user, then super user or power user and gradually developed the skill set of being able to support the business aspects of JDE. Other times, they might have a business degree and come into JDE on the job as a business analyst. This person seldom has any programming or development experience.

Programmer/developer

This person is trained in the software development and programming tools that translate the business requirements as identified by the functional people above into code and programming. Sometimes these individuals simply modify existing JDE objects and in other cases, develop entire suites of applications using the OneWorld/EnterpriseOne development tools including the Report Design Aid (RDA), Table Design Aid (TDA), business function C-code design tools and others using JDE’s change management system, Object Management Workbench.

 CNC/system administration

This is a catch-all function comprising all that the two positions above do not cover including, installation, upgrades, updates, change management, system administration, security, performance tuning, package build and deployment and over-all architecture. The CNC title is taken from the term Configurable Network Computing the proprietary JD Edwards system architecture.

OneWorld client–server ERP system launched

The company had gradually been adding functions to its accounting software, evolving it into a platform-independent ERP application. Late in 1996, the software was ported to client–server systems. It was branded JD Edwards OneWorld. OneWorld was an entirely new product, with a graphical user interface replacing the old “green-screen” interface and with a distributed computing model replacing the old server-centric model. This newer technology used the so-called Configurable Network Computing or CNC architecture to transparently shield business applications from the servers that ran those same applications, the databases in which the data was stored, as well as the underlying operating system and server hardware.

By first quarter 1998, JD Edwards had 26 OneWorld customers and was finally implementing its strategic vision of “life after AS/400″, moving its mid-sized company customers to the new client–server flavor of ERP. By second quarter, JDE had 48 customers.[5] Later, by 2001, JD Edwards could state that it had more than 600 customers around the world using its OneWorld ERP software, representing a fourfold increase over 2000. [6]

McVaney takes JD Edwards public and retires

McVaney felt that in order to compete effectively, his company needed additional capital and needed to go public. Bringing in Doug Massingill in as CEO, JD Edwards went public on September 24, 1997, at an initial price of $23 per share, trading on NASDAQ under the symbol JDEC. By 1998, JD Edwards revenue was in excess of $934.0 million. McVaney decided he could retire.

Quality control issues with OneWorld begin to surface

Within a year of the release of OneWorld, customers and industry analysts were discussing serious reliability, unpredictability and other bug-related issues. In user group meetings, these issues were raised with JDE management. So serious were these major quality issues with OneWorld that customers began to raise the possibility of class-action lawsuits.

 McVaney returns

By 2000, Ed McVaney came out of retirement and returned as CEO, replacing Massingill, specifically to get OneWorld back on track. By this time, ongoing problems with quality control of the company’s client–server OneWorld product were severely cutting into the Company’s credibility as an ERP provider. As his programmers worked to fix the software bugs, McVaney stood firm that his company would wait as long as necessary to release an absolutely ironclad-reliable upgraded ERP product. At an internal 2000 meeting in Atlanta, GA with some of his company’s CNC consultants, McVaney told them he had decided that he would “wait however long it took to have OneWorld 100% reliable” and had thus delayed the release of a new version of OneWorld because he “wasn’t going to let it go out on the street until it was “ready for prime time.” After a delaying the upgrade for one year and refusing all requests by marketing for what he felt was a premature release, in the fall of 2000, JD Edwards released version B7333, now rebranded as OneWorld Xe.

The release OneWorld Xe saw a marked improvement in quality. The earlier quality issues, patching process, and change management process had been markedly improved. The product was received with a collective sigh of relief by both customers and a doubtful press.

We proved to be the most stable release to date and went a long way towards restoring customer confidence. McVaney had also been quietly encouraging customer feedback by supporting the totally independent JD Edwards user group called Quest International. Confident that the company was on the right track, McVaney retired again in January 2002, bringing in Robert Dutkowsky from Teradyne as the new president and CEO. McVaney remained on the company’s board of directors.

Web-based client, continued product evolution, and EnterpriseOne

After the release of Xe, the product began to go through more broad change and several new versions. A new web-based client, in which the user accesses the JD Edwards software through their web browser, was introduced in 2001. This web-based client was robust enough for customer use and was given application version number 8.10 in 2005. Initial issues with release 8.11 in 2005 lead to a quick service pack to version 8.11 SP1, salvaging the reputation of that product. By 2006, version 8.12 was announced. Throughout the application releases, new releases of system/foundation code (called Tools Releases) were announced, moving from Tools Release versions 8.94 to 8.95. Tools Releases 8.96, along with the application’s upgrade to version 8.12, saw the replacement of the older, often unstable proprietary object specifications (also called “specs”) with a new XML-based system, proving to be much more reliable. Tools Release 8.97 shipped a new web service layer, later called Oracle Fusion Middleware, allowing the JD Edwards software to communicate with third-party systems.

JD Edwards company is sold

Within a year after Robert Dutkowsky signed on as president and CEO of JD Edwards, the company began to see changes in ownership.

2003 buyout of JD Edwards by PeopleSoft

In June 2003, the JD Edwards board agreed to an offer in which PeopleSoft, a former competitor of JD Edwards, would acquire JD Edwards. The takeover was completed in July. OneWorld was added to PeopleSoft’s software line, along with PeopleSoft’s flagship product Enterprise, and was renamed EnterpriseOne.

2004 buyout of PeopleSoft by Oracle

Within days of the PeopleSoft announcement, Oracle Corporation mounted a hostile takeover bid of its rival competitor PeopleSoft. Although the first attempts to purchase the company were rebuffed by the PeopleSoft board of directors, by December 2004 the board decided to accept Oracle’s offer. The final purchase went through in January 2005; Oracle now owned both PeopleSoft and JD Edwards. Most JD Edwards customers, employees, and industry analysts predicted Oracle would kill the JD Edwards products.

Continued development of the JD Edwards ERP products

Today, the JD Edwards products are called respectively, Oracle JD Edwards EnterpriseOne and Oracle JD Edwards World. Oracle announced that JD Edwards support would continue indefinitely.

Oracle has announced a product under development called Project Fusion. This product will be designed to co-exist or replace existing Oracle eBusiness Applications Suite, as well as products acquired from PeopleSoft (Enterprise) and JD Edwards (OneWorld/EnterpriseOne and World).

Oracle continues to enhance the JD Edwards EnterpriseOne suite. The latest offering of EnterpriseOne is application version 9.0 Update 1 on Tools Release 8.98 Update 3,[7] and World with A9.1.

JD Edwards’ founders involvement in philanthropy

In May 1998, Ed McVaney donated more than $32 million to the University of Nebraska-Lincoln to establish the JD Edwards Honors Program. This program is charged with educating the next generation of business professionals by combining computer science education with business management skills. JD Edwards’ founder and M.I.T. graduate Hintze donated more than $28 million to the advancement and development of Massachusetts Institute of Technology. Hintze died in September 1996 but left a continuing legacy with his gifts and education.

 

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