DENVER – Amidst speculation and hand-wringing over last week’s takeover news, the Smothers Brothers sang “”The Impossible Dream”” at the opening of J.D. Edwards’ annual user group conference Tuesday.
The comedy duo,
co-headliners at an evening concert for 7,000 customers, partners and JDE employees here, also joked about the dream turning into a nightmare featuring an “”evil Larry.””
That would be Larry Ellison of Oracle Corp., who threatens to break up JDE’s proposed merger with PeopleSoft Inc. with an all-cash offer for the bigger company. JDE doesn’t figure in his plans.
But while vigorously defending his proposed deal with PeopleSoft, JDE chair and CEO Bob Dutkowsky made it clear that if Oracle succeeds it won’t be a surprise. “”If the PeopleSoft deal falls apart we have tremendous options,”” he told reporters, “”not the least of which is to go in and take a bunch of dissatisfied Oracle customers.””
Industry analysts here agree that Oracle’s US$16 a share bid for PeopleSoft stock is very low and undoubtedly will be fattened. The question is when. In the meantime, JDE and PeopleSoft customers are hesitating on upgrading or investing in new software from the two firms, posing risks to their bottom lines and share prices.
In an attempt to show how seriously they take that threat, JDE executives are meeting prospective software buyers to address their concerns.
Dutkowsky told reporters on Monday how he lobbied a prospective customer with US$60 million to spend on enterprise planning software.
“”After 30 minutes together, J.D. Edwards is still in the mix”” and hadn’t crossed the company off its list, he said proudly.
Harry Debes, senior vice-president for the Americas, told reporters prospects are asking for written promises of long-term product support as a condition of purchases.
“”I’ve said to them, ‘Give me the things you need to be comfortable. Give me the language you need in the agreement between our two firms to give you comfort and we will see if we can get you that.’
“”If a customer comes with a shopping list we’ll take it to our legal department and their legal department as see if we can use this language,”” he said. “”If the answer is no we’ll have to see if we can find a compromise.””
While Dutkowsky hopes the PeopleSoft deal will be done by the end of September, he warned customers putting off decisions could be costly.
But “”for every customer that will pause, another will move forward”” he added confidently.
To help the cause, he thrashed Ellison’s promise to stop development of PeopleSoft products if his bid succeeds and help them to move to Oracle applications by saying “”that’s just unacceptable. . . . We will not force our customers to migrate from one product to another.””
Part of the message JDE executives want the media and analysts to spread is that JDE is a healthy company still worth buying from. Forrester Research analyst Paul Hamerman agrees.
Prospects “”should move forward with their plans (to buy JDE applications),”” he said in an interview, in part because if everything falls apart JDE can survive. “”Their products will continue to be improved.”” The odds are its deal with PeopleSoft will go ahead, he also said.
Companies thinking of buying or upgrading PeopleSoft applications, on the other hand “”face more uncertainty.”” In fact, he said, customers may be able to influence the outcome.
“”If they hold off or do nothing, that would support Oracle’s bid. If they buy, then they’re supporting PeopleSoft.””
While strumming “”The Impossible Dream,”” Dick Smothers talked about the message in the song that JDE executives will take to heart: “”Fight for what you believe in. If you do that, you’ll be a winner no matter what happens.””
The other co-headliner JDE chose for that concert: The Blues Brothers.
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