Customer Needs

By Lisa Vaas  |  Posted 2004-10-01 Print this article Print

Since Oracle first made its offer, PeopleSofts board of directors has refused to sit down and negotiate. Conways dismissal may mean that this hard-line attitude is changing and that the board is revising its internal estimates of where it believes PeopleSofts stock price could be in the coming year or two, based on internal forecasts. The logical thing for PeopleSofts board to do next, according to Marlin, is to sit down with Oracle and try to negotiate a price that exceeds the boards internal evaluation. That process usually takes weeks or months. Of course, PeopleSofts board may have already done such an internal evaluation, and Conways demise may well be the result of that evaluation. "They might have done it by now, for all we know, and that might have prompted their [dismissal of Conway]," Marlin said.
Meanwhile, Duffields return to leading the company he founded signals that the level of customer unhappiness under Craig Conways 10-year tenure was so profound, it forced the company to return to the good old days when customers were PeopleSofts top priority, some believe.
"The level of customer dissatisfaction came to the point when Dave Duffield felt he had to step in and bring it back to the original philosophy," said Paul Hamerman, a vice president of Forrester Research Inc., in Cambridge, Mass. Click here to read about a recent earnings report from PeopleSoft. Before he turned over the reins to Conway, Duffield was famously people-oriented, a bear-hugger and a listener, a "people person" who obviously cared. Under the guidance of the stiffer Conway, customers grew alienated, particularly after a series of customer-unfriendly moves. One notable misstep was steep maintenance pricing increases, Hamerman said. "He relentlessly raised prices on maintenance," he said. "He was too aggressive there. He did that to replace declining license revenues, to keep the [companys revenues up]." Users have also complained to Forrester analysts about a scarcity of technical foresight at PeopleSoft. "Weve been critical on PeopleSoft [for a] lack of technical vision," Hamerman said. "Especially since the [J.D. Edwards & Co.] acquisition and [the Oracle] tender offer came about, we havent seen any good indications of technical innovation coming out of PeopleSoft, [whereas arch competitor] SAP [AG] has been very active in that area." If Duffield stands any chance of rebuffing Oracles takeover, hell have to shore up customer confidence and regain customer trust, Hamerman said. "His first moves should be to try to rebuild customer confidence in the company. He should explain the companys technology vision, in some detail, to create more excitement around the products and technology." Beyond that, Duffield must repair the damage done to customers freedom of choice. "He should offer the customers more choices in how they want to consume maintenance services," Hamerman said. "Basically, not have an all-or-nothing deal, but break out what they want and need. Maybe they dont need enhancements, just compliance updates, technology support and so on." Or, Marlin said, maybe its just time for Duffield to sit down and negotiate with Oracle. "[PeopleSoft has] been unwilling to sit down with Oracle, since Conway hates Larry Ellison," he said—one of multiple hurdles that Oracle has now leapt. Check out eWEEK.coms Database Center at for the latest database news, reviews and analysis.

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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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