Page Two

By Lisa Vaas  |  Posted 2003-06-06 Print this article Print

Jones said PeopleSofts planned acquisition of J.D. Edwards makes sense to him since PeopleSoft would get J.D. Edwards manufacturing software expertise and J.D. Edwards could take advantage of what he said is PeopleSofts superior technology infrastructure. He sees little benefit from Oracle buying PeopleSoft. "Im by no means a market expert, but my guess is its gamesmanship," said Jones. "At least I certainly hope so. I dont want to see Oracle acquire PeopleSoft. I wouldnt want to see the Oracle structure imposed on PeopleSoft."
And if the acquisition does go through?
"It would make us re-evaluate our long-term arrangements," said Jones. Nigel Montgomery, European research director at AMR Research, said many PeopleSoft customers would have to re-evaluate their ERP investments if the deal went through. "The only people happy here are SAP," said Montgomery, in London. "All of PeopleSofts customer base would be going back on the market." Montgomery said he didnt expect Oracle Chairman and CEO Larry Ellison would sit idly by while the combined PeopleSoft-J.D. Edwards leapfrogged Oracle in market share. He doubts Oracle can pull it off though, noting that the Redwood Shores, Calif.-based company would likely have to offer between $23 and $25 a share to make the deal palatable to PeopleSoft shareholders, rather than the opening bid of $16 per share. Oracles current bid would eat up $5.1 billion of Oracles $5.5 billion cash horde, Montgomery noted. He said instead the move was likely made to force PeopleSoft to empty its own cash reserves since PeopleSoft may have to close the J.D. Edwards deal sooner to stave off Oracles takeover. A cash acquisition would close faster than a stock acquisition, which PeopleSoft originally proposed, Montgomery explained. "Then PeopleSoft for the rest of the year wouldnt have enough cash to do anything," Montgomery said. "On the face of it, its a sensible move by Oracle. But the ones who lose out are the PeopleSoft customers. At the end of the day its a horrible deal for them."´

Lisa Vaas is News Editor/Operations for and also serves as editor of the Database topic center. Since 1995, she has also been a Webcast news show anchorperson and a reporter covering the IT industry. She has focused on customer relationship management technology, IT salaries and careers, effects of the H1-B visa on the technology workforce, wireless technology, security, and, most recently, databases and the technologies that touch upon them. Her articles have appeared in eWEEK's print edition, on, and in the startup IT magazine PC Connection. Prior to becoming a journalist, Vaas experienced an array of eye-opening careers, including driving a cab in Boston, photographing cranky babies in shopping malls, selling cameras, typography and computer training. She stopped a hair short of finishing an M.A. in English at the University of Massachusetts in Boston. She earned a B.S. in Communications from Emerson College. She runs two open-mic reading series in Boston and currently keeps bees in her home in Mashpee, Mass.

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