Canadian users mull impact of Oracle’s DoJ victory

Oracle is one step closer to completing its hostile takeover of PeopleSoft, but one user group says that any impact on the installed base won’t be felt for years to come.

Last week, a U.S. District Court Judge rejected the Department of Justice’s claim that Oracle’s takeover bid is anti-competitive.

Judge Vaughan Walker argued that there are sufficient alternatives in the marketplace should Oracle be successful in digesting PeopleSoft.

Marie Sargent, president of the PeopleSoft Eastern Canada Regional User Group (ECRUG), said that the recent PeopleSoft takeover of J.D. Edwards has worked out well for members.

“”We’ve added a richer group of knowledge to our user group meetings,”” she said. “”Will that happen from Oracle/PeopleSoft? Sure, I can’t see why it wouldn’t. It would give us more opportunities, more networking, more learning.””

Patricia Dues, president of the U.S.-based Oracle Applications User Group (OAUG), said that she expects a takeover to enhance Oracle’s product offerings and be ultimately be a boon to her membership. Like Sargent, she relishes the opportunity to increase the users she can interact with.

Dues said that the OAUG hasn’t determined if it would eventually merge with a PeopleSoft user group, but said the software is less important than the issues it’s solving. Dues is currently in Orlando attending OAUG’s Connection Point user conference, which runs until Wednesday.

“”It doesn’t matter to me necessarily if we’re all using the same software product. (Users) have a lot of the same business functions,”” she said. “”So with this acquisition, I see the possibility of having more networking opportunities, working with other people and learning more ways about how our organization can be more effective and efficient.””

If Oracle ultimately triumphs, PeopleSoft applications won’t be disrupted for another five to 10 years, said Sargent. “”Let’s face it, our legacy systems are gone by then anyway and we’re already ready to start new projects and do new things. I would never believe that Oracle would leave us dangling. They’ll have something for us.””

Craig Read, president of the Toronto Oracle Users Group (TOUG), applauded Judge Walker’s decision. He agreed with Walker that there is sufficient competition in the market.

“”PeopleSoft themselves, of course, bought J.D. Edwards. The reason is fierce consolidation and market pressure. The industry will consolidate, so there’s no point in government getting involved in that. Let the market decide,”” he said. “”It depends on the functionality you want, but there’s a lot more competition in the marketplace than just SAP, Oracle and PeopleSoft.””

While that’s true, it is those three companies that own the lion’s share of the market, argued Warren Shiau, analyst with IDC Canada Ltd. The DoJ has the right to appeal Judge Walker’s decision and market share, rather than the number of potential players in that market, may factor into their rebuttal, he said.

Oracle may have won one more battle in its campaign to take over PeopleSoft, but there are several more to come. PeopleSoft, for example, has filed a separate suit against Oracle in California and is seeking more than US$1 billion in punitive damages. The lawsuit, in which PeopleSoft alleges that Oracle has engaged in unfair business practices, will go to trial on Nov. 1.

PeopleSoft spokesperson Steve Swasey said that the company is “”reviewing the implications”” of last week’s decision, but ultimately nothing has changed.

PeopleSoft’s board of directors rejected Oracle’s US$21 per share offer last May. “”They realized it was not a fair bid for the shareholders and it undervalued the company, and they rejected it. That doesn’t change. The bid is still $21,”” said Swasey.

The decision still rests with PeopleSoft’s shareholders, said Shiau. It will be up to them to determine whether PeopleSoft’ performance over the foreseeable future represents more value than what Oracle is offering for their shares.

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