PeopleSoft customers not fazed by Oracle bid

ANAHEIM, Calif. — Focused on the job of making a friendly merger successful, PeopleSoft executives and customers insist they aren’t preoccupied with the looming question of whether Oracle will be victorious in its hostile takeover bid.

While it may have kept some awake at night when the proposed

acquisition hit the headlines, today, Pete Smith, regional vice-president PeopleSoft Canada, dismisses the subject as a distraction, saying the possibility of Oracle being successful in its proposition is something that doesn’t keep him or anyone else at the company awake at night.

“”It’s now a legal process,”” said Smith at an interview during the company’s annual Connect end user conference last month. “”It’s so far off our radar scope.””

Instead, Smith says the company is focused on making the merger with J.D. Edwards as smooth as possible and delivering an integrated set of the two company’s product lines.

“”This wasn’t a company that needed saving, but we’ve signed on for a pretty huge journey.””

But three months ago, customer reaction to the Oracle bid was a very different story.

What Smith will concede is that immediately after June 6, when Oracle announced its intentions, just about every meeting he took with customers started with a question about the possibility of Larry Ellison’s quest for PeopleSoft.

“”They were concerned about what it would mean,”” said Smith. “”Today, there might just be a question at the door at the end of the meeting.””

Smith said the Canadian Competition Bureau has been looking into how a possible takeover could affect PeopleSoft users in this country.

“”I am aware they are calling our customers,”” he said. “”At least a dozen have indicated they have been called and that the questions are very in-depth and the person asking the questions is clearly knowledgeable about the issues. Our clients are telling them what they think the impact on the business and the industry would be.””

For Gilles Champagne, manager of employee services, human resources with the City of Calgary, the news that Oracle was looking to takeover PeopleSoft came at a critical time for his department. The city already had millions invested in PeopleSoft applications and was rolling out an HR upgrade, trying to squeeze costs out of the system and better manage the city’s 12,000 employees.

“”The initial comments about whether (Oracle) they would buy (PeopleSoft) and shut it down certainly got people’s attention,”” said Champagne, noting city officials began asking him whether the municipality’s investment was at risk, since the PeopleSoft software is considered the “”backbone”” of the city’s system. Ultimately, he said “”it is also public funds.””

Champagne was given responsibility to investigate the situation over the next few weeks, looking at what analysts and others were saying about the potential impact.

“”We spoke to Gartner and took a good look at it,”” said Champagne. “”It took a couple of weeks before we arrived at a certain comfort level, but ultimately we decided it was an acceptable risk. We weighed every option and decided to move cautiously.””

PeopleSoft CEO Craig Conway thanked customers for going ahead with purchases despite the unsettled times.

Conway noted that on June 30 PeopleSoft exceeded financial guidance for Q2. To further shore up strength on its end, PeopleSoft announced plans Sept. 4 to buy back $350 million of its own stock.

“”We think the best investment of cash in the bank is to buy back our own stock,”” said Smith.

Oracle’s $7.5 billion hostile takeover bid for PeopleSoft ends Oct. 17.

At the Connect conference, PeopleSoft chief technology officer Rick Bergquist and Ram Gupta, executive vice-president of products and technology, outlined where customers can see J.D. Edwards products being woven into the PeopleSoft set of tools in the next 90 days. Among them will be the JDE real estate management tool and PeopleSoft supplier relationship management, which will be made available for all customers in the next 90 days. The real estate tool is one PeopleSoft account executives are expected to get some serious interest in from customers, especially users such as banks.

“”We think there is some low-hanging fruit there,”” said Smith.

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Jim Love, Chief Content Officer, IT World Canada

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