White Knights in Waiting

By John Pallatto  |  Posted 2004-10-01 Print this article Print

?"> IBM itself has tried to scotch suggestions that it would abandon it long-held policy of staying out of the enterprise applications business by acquiring PeopleSoft or even by making a minority investment in the company.

"We dont have any intention of getting into the applications business," Buell Duncan, IBMs general manager of ISV and developer relations said in a recent interview with eWEEK.com. "We are in the partnering business" with companies such as PeopleSoft. While the PeopleSoft alliance is notable for its potential scale, it is still one of thousands of business alliances that IBM has engaged in around the globe, he said.

Click here to read the entire eWEEK.com interview with Buell Duncan, IBMs general manager of ISV and developer relations.
The top computer-system vendors and integrators such as IBM and Hewlett-Packard Co. dont have a fundamental business need to get into the applications business, said Stephen Mader, vice chairman of the executive recruitment firm Christian & Timbers, in New York. "Their own success and mission in life dont depend on it," he said.

If either IBM or HP were interested in being a white knight, they could have stepped forward before now. "They havent been making a play in that direction. They could have done it a long time ago," he said. Neither PeopleSofts firing of Conway nor the DOJs decision not to appeal the Oracle antitrust court decision "would stimulate either to change their business strategy," Mader said.

What might make more sense would be for Computer Associates International Inc. to step in, Mader said, with its history of acquiring companies and its closer alignment with PeopleSofts business. But CA is dealing with its own legal problems and management disarray resulting from an internal and federal investigation of accounting and securities fraud.

Furthermore, CAs former CEO Sanjay Kumar had sold off nearly all of his companys applications business to concentrate on security, as well as data center management technology and services.

That leaves a company such as Unisys Corp., which is primarily a computer systems services organization rather than an application software vendor. However, Mader said that "for Unisys and CA, [an acquisition would] make both stronger, and bring services support and revenue [they] need and want."

Check out eWEEK.coms Enterprise Applications Center at http://enterpriseapps.eweek.com for the latest news, reviews and analysis about productivity and business solutions.

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John Pallatto John Pallatto is eWEEK.com's Managing Editor News/West Coast. He directs eWEEK's news coverage in Silicon Valley and throughout the West Coast region. He has more than 35 years of experience as a professional journalist, which began as a report with the Hartford Courant daily newspaper in Connecticut. He was also a member of the founding staff of PC Week in March 1984. Pallatto was PC Week's West Coast bureau chief, a senior editor at Ziff Davis' Internet Computing magazine and the West Coast bureau chief at Internet World magazine.

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