Page Two

By Dennis Callaghan  |  Posted 2003-06-09 Print this article Print

ESP chose PeopleSoft over Oracle and J.D. Edwards just last December for a systemwide ERP and CRM (customer relationship management) migration from a legacy platform. "We thought the culture of [PeopleSoft] was a way better fit with ours," said Jones. "They had a track record of listening to and working with customers to make sure the customers needs were met. We didnt get that sense from Oracle. It was one of the telling things."

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 was 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," he said.

Nigel Montgomery, an analyst at AMR Research, said many PeopleSoft customers would have to re-evaluate their ERP investments if the acquisition is approved by shareholders and regulators.

"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 to sit idly by while the combined PeopleSoft-J.D. Edwards leapfrogged Oracle in market share. He said he doubts Oracle can pull it off, though, noting that the Redwood Shores, Calif., 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.

Montgomery said that the move, instead, was likely made to force PeopleSoft to empty its cash reserves since PeopleSoft may have to close the J.D. Edwards deal sooner to stave off Oracles takeover.


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