Customers Slam Oracle Takeover Bid

Oracle's hostile takeover bid for PeopleSoft is not going over well with the two companies' customers, who claim it would reduce competition and as a result hinder innovation.

Oracle Corp.s hostile takeover bid for PeopleSoft Inc., announced this morning, is already meeting resistance from customers of both companies.

The proposed takeover, coupled with PeopleSofts planned acquisition of J.D. Edwards & Co., announced earlier in the week, would create a $5.5 billion ERP (enterprise resource planning) business and take 27 percent of ERP market share, second only to SAP AG, which has $7.4 billion in ERP revenues and 36 percent market share, according to numbers released this week by AMR Research Inc.

While that may please some shareholders, customers feel theyre being left out in the cold.

"We would not want to see Oracle acquire PeopleSoft," said Al Jones, IT business systems manager at Environmental Systems Products (ESP) Holdings Inc. in East Granby, Conn. "There needs to be competition to drive real innovations and new product directions. Having a couple of big players consolidating the market would not be good."

Kelly Cox, an Oracle database administrator who owns a small consultancy in Alexandria, Va., had a similar view. "If Oracle bought [PeopleSoft and, by default, J.D. Edwards] and intends to merge the tools, Id think that would be a disservice. It reduces competition in that market. I think competition is healthy, and a lot of people feel that way."

Cox did say such an acquisition could be a boon for application integration, but thats about the only benefit she sees.

Ironically, Environmental Systems Products chose PeopleSoft over Oracle and J.D. Edwards last December for a systemwide ERP migration from a legacy platform and CRM (customer relationship management) deployment.

"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."