NEW YORK—Officially, Steve Mills declined to comment on Oracles hostile takeover bid for PeopleSoft, a move that could put two of IBMs key application software vendor partners under control of one of its chief competitors.
But Mills, the senior vice president and group executive of IBMs Software Group, left attendees at IBMs Integration Media Day here Tuesday with little doubt of where he stood on Oracle CEO Larry Ellisons tactics.
“Im not going to comment on whats going on,” said Mills. “But clearly our relationship with PeopleSoft is a strong one. We have a relationship with Oracle too, but theyre more of a competitor than a partner. So you can draw your own conclusions.”
Mills took potshots at Ellisons stated plans to discontinue development of PeopleSoft applications post-acquisition and more broadly, Oracles strategy to get enterprises to standardize on all of its applications, pointing out that Ellison was much more open to application integration when the only applications Oracle had were its financials.
“If all you have is a hammer, you think everythings a nail,” said Mills.
“Their applications touch a low minimal percentage of all business processes,” he said, stressing enterprises needs for other applications besides Oracles.
Dan Vaught, middleware manager for Safelite Glass Corp., backed up Mills assertions. Safelite uses Oracle for many of its applications including purchasing, procurement, warehouse management, billing and financials. But Safelite turned to software from Siebel Systems Inc. for order management and Baan for scheduling, because those vendors applications were a much better fit for Safelites needs than competitive offerings from Oracle.
“Oracle didnt meet our needs for scheduling,” said Vaught. “If we cant get a [auto glass repair] technician scheduled and sent to dispatch, our business is gone.”
Vaught said Siebels underlying data structure and model was stronger than Oracles, so Safelite turned to Siebel for order management.
“[Oracle] is taking an interesting approach to the industry,” said Vaught, of Oracles bid to take over PeopleSoft. “Im not sure if theyre just trying to take out a competitor or if theyre forcing their solutions onto their existing customers.”
Vaught said a takeover of PeopleSoft by Oracle would reduce competition in the enterprise applications space.
“I dont know if one package can solve industrys needs,” he said. “Each software vendors package adds value. A lot of people are using PeopleSofts applications because they had value to what theyre doing. Itd be a shame to see that go away.”
Mills said application software vendors need to adapt to whatever technology is in place at enterprises, that the typical enterprise is not a “build from scratch” environment.
Expecting customers to standardize on Oracle apps is a “pretty naïve position for [Ellison] to take,” Mills said.
Mills said last weeks proposed consolidation in the enterprise applications space would do little to change the integration equation.
“Customer demands will remain unchanged regardless of what the vendors do to each other or with each other,” he said. “Theres been consolidation and expansion in the industry for years.
“At the end of the day, companies are still going to have to focus on what their customers needs are,” Mills continued. “Regardless of the shifting sands in the industry, that fundamental principle wont change.”