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How many more billable hours must transpire, how many more legal pads must be wasted? Oracles hostile takeover attempt of PeopleSoft started as an ego-driven attempt to trump an uppity competitor. It has turned into a pointless display of stubbornness that is hobbling innovation in the ERP software market.
With the Department of Justice and seven states opposing the bid on grounds that it would severely reduce market competition, Oracle should use the cover provided by the DOJ and states to go back to the business of making and selling software based on its own distinctive technology. It should be blazing new trails with commendable innovations such as its market-leading work in grid and utility computing, not looking for its future in the rear-view mirror. Leaders look ahead to new opportunities and build a bridge toward them; insecure companies look back at potential competitors and try to build barriers to block them.
We said in this space last year, soon after the bid was launched, that it was a distraction for Oracle, one that could harm the company by diverting its attention from improving its products and serving its customers. We noted then that a certain amount of customer dissatisfaction with Oracle had been building around the issues of product support and price—discontent that Oracle would have done well to address.
Nine months have passed, and although Oracle has garnered many headlines for its hostile bid, we wonder where customers stand on the companys priority list. When the case comes before a judge in June, Oracles discount sheet—which lists the amount Oracle is willing to mark down its products when competing against PeopleSoft and SAP—is expected to be demanded as evidence. Without PeopleSoft as a competitor, Oracle would feel free to sell its products at a higher markup, the DOJ will contend. Such logic is obvious to us.
Further, Microsoft has submitted a sworn statement that it will not enter the market for ERP applications for two years and thus will not be a direct competitor to Oracle in that market until then. Oracle should have been spending the last year preparing its wares to compete with Microsoft eventually, rather than attempting to stifle its competitors and gain market share by purchasing PeopleSofts user base.
Eliminating a competitor wont help Oracle compete. If it were forced to sharpen its wares against PeopleSoft, the company would be much better prepared to do battle against Microsoft when that company begins its enterprise push two years hence.
Since it appears that Oracle is impervious to sound advice in this matter, the only good news is that its bid will, one way or the other, be decided by July. Were confident that the DOJ and the states will prevail. The downside, however, is that a year of advancement in application development will have been squandered. Thats not good for users, for Oracle or for the industry.
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