Antitrust suit marks final chapter

PeopleSoft Canada executives say a move by the U.S. Department of Justice late last month to file an anti-trust suit against Oracle Corp.’s bid to buy the California-based company marks the final chapter in the 10-month saga.

“”It’s really the official conclusion to what we really put behind us

in October,”” said Pete Smith, regional vice-president, PeopleSoft Canada Global Services. “”We’ve had tremendous support from customers and clearly the Justice Department has had a lot of feedback from PeopleSoft customers. No doubt there was a cloud there for a while but it has become thinner and thinner over time.””

On Feb. 26 the Department of Justice in Washington D.C. announced it was filing a civil antitrust lawsuit in U.S. District Court in San Francisco to blockOracle’s attempt to buy PeopleSoft. The Attorneys General of Hawaii, Maryland, Massachusetts, Minnesota, New York, North Dakota and Texas also joined the lawsuit.

The argument being made is that if the merger were to take place, it would eliminate competition between the leading providers of enterprise HR and financial management software, leaving only the merged company and SAP providing product to the marketplace at that level.

It was last June Oracle Corp. first announced the then US$7.5 billion hostile takeover bid for PeopleSoft. To shore up strength on its end, PeopleSoft later moved to begin a buy back of $350 million of its own stock.

Canadian vice-president and managing director Andy Aicklen said the news prompted “”a big sigh of relief.””

And while it is not unprecedented that a case like this can be overturned, it usually doesn’t happen, says Warren Shiau, IDC Canada software analyst.

“”There are a lot of states behind this — enough that it would be hard to see how Oracle could get this reversed with all this pressure,”” said Shiau.

In his opinion, much of the drama over the possible merger ended last summer when PeopleSoft instituted its share buy-back program.

“”When there was no cap on the price they would pay and the stock price was already sitting above Oracle’s offer at the time, at that point I think everyone in PeopleSoft started to put things behind them. Oracle had no stake at that point in the shares tendered to it,”” he said.

While customers had a lot of questions about the looming bid by Oracle — including many who were customers of the recently–acquired J.D. Edwards product line — Smith and Aicklen say those questions have largely gone away.

One of those customers was Keith Campbell, vice-president Finance and CFO of BPB North American Services Inc. of Mississauga, Ont., a customer of J.D. Edwards since 1999. But Campbell said at the time, he was more concerned about what PeopleSoft’s intentions were for the J.D. Edwards line he was currently using.

“”When PeopleSoft announced it would protect the product line it made us feel a lot more comfortable,”” said Campbell, who claims his department has the lowest IT costs in the BPB group. “”I was glad to see that after the acquisition PeopleSoft kept the architecture of the JDE product.””

The UK-based BPB, a manufacturer of wallboard and plaster building products, operating in 50 countries, had implemented J.D. Edwards OneWorld (now EnterpriseOne), with a complete ERP implementation including HR and payroll. They are now looking at upgrading to PeopleSoft’s HR tool set, but have not made a decision.

PeopleSoft Canada expects to see growth in the mid-market and new installations with the federal government, expansion into Quebec and the health care sector. Trends identified for 2004 include customer profitability management, which involves helping customers pull metrics from throughout the enterprise and the extended supply chain or supplier relationship management that involves Web services.

RFID applications are also expected to draw interest, but to date only major U.S. customers such as Wal-Mart have expressed interest, said John Gibson, director of solution consulting for PeopleSoft Canada.

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