PeopleSoft Seals Deal

JDE acquisition closes; Oracle takeover bid still looms.

PeopleSoft Inc. customers waiting to see if the acquisition of their biggest technology provider by Oracle Corp. will be successful got some company last week when PeopleSoft closed its own $1.8 billion purchase of J.D. Edwards & Co.

PeopleSoft officials, in Pleasanton, Calif., put off public discussion of their plans for integrating their software line with

J.D. Edwards until next month, but industry sources briefed by PeopleSoft expect to see quick action.

Within 90 days, they said, PeopleSoft will likely release updates to the flagship offerings from each developer—PeopleSoft 8 and J.D. Edwards 5—that give both a similar look and feel. At the same time, there will be some cleanup between the two product lines integration points, said Nigel Montgomery, an analyst with AMR Research Inc., in Boston.

One area that could see some changes, according to Montgomery, is J.D. Edwards CRM (customer relationship management), which is based on technology acquired from Youcentric Inc.

"PeopleSofts CRM capabilities are much more robust than Youcentric," Montgomery said. "Youcentric is really focused on financials, and thats not JDEs forte. There is some discussion about making more of a play of PeopleSoft [CRM] into the JDE camp. Not that theyve made a decision to kill off Youcentric ... but theres no question that PeopleSofts CRM will lead."

PeopleSoft President and CEO Craig Conway said in a conference call that his company will market three lines of software: one based on J.D. Edwards technology for IBM iSeries users, one for the midmarket and one for complex enterprises.

The midmarket offering from J.D. Edwards, based in Denver, will incorporate PeopleSoft supplier relationship management capabilities, and the complex-enterprise software, based on PeopleSoft, will absorb J.D. Edwards asset management features. "There is little or no integration risk" for customers, Conway said.

J.D. Edwards CEO Bob Dutkowsky, who is under contract to help Conway through the transition for six months, said that in the last 12 months his company has made about 400 enhancements to its product suites—12 months ahead of schedule.

"Combined [with PeopleSoft] we have an excess of 12,000 customers. The challenge will be to continue to listen to new customers and build functionality," said Dutkowsky.

Some of those customers are looking for a little change rather than a lot. J.D. Edwards user Nick Gomersall said he is hoping he wont have to do wholesale replacement of his software.

"Taking out J.D Edwards financials and replacing them with PeopleSoft is like operating on a healthy man and giving him a new heart, lung and liver transplant," said Gomersall, sales and marketing director for London-based The GL Co., a division of DecisionWorks Software Ltd. "A simple replacement of J.D. Edwards financials may look attractive after a nice dinner and a glass of port, but fundamentally it will not fly."

Meanwhile, Oracles tender offer for PeopleSoft shares expires Aug. 15. Last week, Oracle, of Redwood Shores, Calif., continued its efforts to make PeopleSoft users comfortable with a possible Oracle takeover. In what they called a "Town Hall Meeting" to explain Oracles plans if its $6 billion purchase of PeopleSoft goes through, officials assured PeopleSoft and J.D. Edwards users that they would continue to offer technical support for those products and enhance them.

Oracle Executive Vice President Chuck Phillips said that the PeopleSoft tool set would be supported and customer forums would continue. Oracle hasnt yet mapped out pricing for new products, Phillips said.

"My biggest concern is—I wouldnt say integrity—but the issue around upgrades and supporting of PeopleSoft products," said Bobby Ho, a human resources systems manager with Ricoh Electronics Inc., in Tustin, Calif., which uses PeopleSoft software. "Initially Oracle said, Hey, were not going to support [PeopleSoft products]; were going to integrate PeopleSoft. Now theyre saying theyll support it up to 10 years. How will they support it?"

A human resources manager at a San Jose, Calif., company that uses PeopleSoft software fears the worst from an Oracle buyout of PeopleSoft. "[The merger] will cost us money, bottom line," said the manager, who requested anonymity.