Conway Adds No Luster to Salesforce.com Board

 
 
By John Pallatto  |  Posted 2005-10-07 Email Print this article Print
 
 
 
 
 
 
 

Opinion: The appointment of former PeopleSoft CEO Craig Conway as a member of the Salesforce.com board of directors suggests that the competition with Oracle is going to get personal.

The appointment of former PeopleSoft CEO Craig Conway as a Salesforce.com board of directors member is surprising, and a bit dismaying, considering that he was fired by his previous employer when it was in the midst its tenacious legal battle to avoid a hostile buyout by Oracle. The firing, of course, didnt necessarily mean he wasnt a skilled corporate manager. But it was certainly the result of the fact that he used less than stellar judgment as he waged the ultimately futile campaign to keep PeopleSoft out of Oracles clutches. There may have been no force on earth that could have prevented Oracle from buying out PeopleSoft once Oracle decided that the ERP (enterprise resource planning) software company was an inviting buyout target.
Clear evidence of this is that Oracle ultimately paid a very hefty price to achieve its goal. The final $10.3 billion price was double Oracles original bid.
Click here to read more about Craig Conways appointment to the Salesforce.com board of directors. But it was apparently Conway himself who revealed that PeopleSoft might be open to a merger with the database giant. Testimony by Oracle CEO Larry Ellison in the 2004 Federal antitrust lawsuit that unsuccessfully tried to block the buyout showed that it was Conway who initiated talks on a possible PeopleSoft-Oracle merger as a way for the companies to build an ERP software business that would be more competitive with SAP AG.
Ellison said those talks failed because Conway insisted on being chief executive of the merged applications business, a condition, he testified, that Oracle could not accept because it would be the majority owner of the combined businesses. The PeopleSoft board fired Conway after it learned that Conway had made misleading statements to market analysts that Oracles hostile buyout bid wouldnt cut into sales, when the company already knew that it would. In publicly announcing the firing in October 2004, the board cited a "loss of confidence" in Conways ability to run the company. So why would Salesforce.com decide to place a discredited former CEO on its board of directors? He is certainly experienced in building an ERP software business. He knows the software industry as well as anyone in Silicon Valley. Conway certainly departed from PeopleSoft a wealthy man, one who stood to make even more money when he cashed in his stock after Oracle closed the buyout. As a result he would be a good ally to have on the board as Salesforce.com pursues ambitious plans to turn its on-demand CRM (customer relationship management) system into a general-purpose application development platform for independent software vendors. Next Page: ERP competition is heating up.


 
 
 
 
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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