While Oracle Corp. executives fielded anonymous questions from PeopleSoft Ltd. customers regarding the company’s intentions towards PeopleSoft’s products, support services and current employees, one analyst said what the company really wants is a graceful exit from the takeover saga.
Oracle is hoping that the U.S. Justice Department will deny the deal so that they have an excuse to bow out, said Jennifer Chew, a senior analyst with Forrester Research in Cambridge, Mass.
“I think that once the J.D. Edwards deal was completed with PeopleSoft, Oracle was not nearly as enamoured of the new PeopleSoft as they were of trying to scare off the original PeopleSoft, J.D. Edwards deal from happening in the first place,” Chew added.
But contrary to statements being made by others, Oracle remains fully committed to this transaction, Chuck Phillips, executive vice-president of Oracle said during the meeting.
Stephen Elioff, vice-president and CRM program director at AGF Management Ltd. in Toronto and a customer of both Oracle and PeopleSoft, agrees that the purchase of J.D. Edwards has complicated matters for Oracle. He added that if the hostile bid is completed and Oracle purchases the applications company, Oracle will have to deal with PeopleSoft’s customers and necessity will force the company to do the right thing.
“Of course, this doesn’t speak to the costs, confusion and change issues that this would force upon PeopleSoft customers. Nor does it address the long-term strategic plans that businesses have built around existing partnerships,” Elioff said.
Elioff was unaware that a second town hall meeting had been scheduled and therefore didn’t participate in the event. He said that although he is interested in what both Oracle and PeopleSoft have to say about this matter, nothing said can change the realities that PeopleSoft customers are now dealing with.
“We made our decision when we purchased PeopleSoft (products). That set in motion a number of resource commitments and capital investments that can’t be reversed. Comments made at a town hall meeting, regardless of how genuine they may be, cannot change our circumstances,” Elioff said.
Chew said that PeopleSoft customers are remaining loyal to the company and for the most part they are choosing to participate in the customer outreach programs put on by PeopleSoft as opposed to those initiated by Oracle. She added that the town hall meetings have not done enough to cover up Oracle’s aggressive tactics in the marketplace.
“It may help smooth some of the rough edges but I don’t think it does enough to counteract a lot of the negative feelings out there about Oracle,” Chew added.
To show PeopleSoft customers that an acquisition would be advantageous and non-disruptive to its organizations, Oracle brought in a customer of its Rdb databases. Oracle acquired Rdb from Digital Equipment Corp in Dec 1993.
Mike Rocha, executive vice-president of global support services at Oracle, said that at the time of Oracle’s purchase of Rdb, the company had 10,000 customers using its products. Today, he said that although there are still 2,000 customers using Rdb databases, 8,000 customers have chosen to migrate to Oracle.
Bob Pacek, CIO for El Segundo, Calif.-based DirecTV Inc., has been an Rdb database customers since before the company’s acquisition by Oracle almost 10 years ago and said that Oracle has lived up to the promises it made during the purchase process.
He added that Oracle has never pressured DirecTV to switch from the Rdb line to Oracle’s native products.
“I’ve never been pressured to accelerate any move away from Rdb. It didn’t appear to be an appropriate thing for either party to discuss. So it [has] not happened,” Pacek said during the town hall meeting.
When asked to give advice to PeopleSoft customers on issues to bring up with to Oracle, Pacek had three key points.
He said PeopleSoft customers should look for reassurances that the PeopleSoft engineering and product support teams would remain in place to provide the same kind of support that they are currently receiving. Secondly, customers should look for reassurances that the connections to PeopleSoft teams will continue at least as strongly as before the transaction. Lastly, Pacek said PeopleSoft customers should regularly review the new customer support teams.
Rocha said Oracle plans to do all it can to avoid any interruptions to PeopleSoft customers by keeping PeopleSoft’s support teams in place from day one, and by keeping these support teams under the control of current PeopleSoft employees.
However, Rocha indicated that the transaction is not yet far enough along to determine how many PeopleSoft employees will move over to Oracle if the acquisition is completed.
One of the points Phillips and Rocha repeated throughout the meeting was the fact that Oracle plans to support PeopleSoft products. Phillips added that since June 6 when the company announced its plans to take over PeopleSoft, Oracle has said it will not abandon PeopleSoft users or products.
Phillips said that PeopleSoft’s customer assurance program – which states that Oracle will have to refund PeopleSoft customers up to twice its invested money if Oracle discontinues PeopleSoft’s products – is nothing more than a “news worthy gimmick.” Phillips added that PeopleSoft’s program will have no impact on the market, due to the fact that Oracle has repeatedly said it will honour all of PeopleSoft’s current contracts.
