Oracle, PeopleSoft Already Talking on Transition

Although Oracle co-president Charles Phillips says the combined company will "hit the ground running in January," he sidesteps questions on what will become of PeopleSoft's $1 billion middleware deal with IBM.

Oracle Corp. hopes to close its buyout of PeopleSoft Inc. within two weeks and have a new management organization in place for the combined companies sometime in January, Oracle co-president Charles Phillips said Tuesday.

"The likeliest scenario is that the deal could be closed in terms of us having the keys around Dec. 30," Phillips told reporters participating in a telephone news conference Tuesday. "After that time point, we will obviously move forward and [PeopleSoft] employees will be Oracle employees," he said.

"Operationally, we think we will hit the ground running in January; the new organization will be in place by then," Phillips said.

One big question, however, remains unanswered: What will happen to PeopleSofts partnership with IBM?

Oracles acquisition of PeopleSoft, announced Monday morning, ends an 18-month-long battle waged by Oracle to acquire PeopleSoft.

The deal comes despite repeated refusals from PeopleSofts board of directors to entertain any of Oracles half-dozen tender offers, several legal actions against Oracle including those by the U.S. Department of Justice and the European Commission, and millions of dollars spent on legal fees alone.

/zimages/6/28571.gifRead more here about the Oracle-PeopleSoft merger agreement.

Phillips on Tuesday said the two companies are "already talking" and are hard at work; he plans to head over to PeopleSofts Pleasanton, Calif., headquarters Wednesday, just across the bay from Oracles Redwood Shores mirrored offices, to continue talks.

Given Oracles go-it-alone strategy in the past, which has left a number of third-party resellers and system integrators on the outs, Phillips answered several questions during the roundtable discussion regarding the fate of PeopleSoft and J.D. Edwards & Co. partners and resellers.

Concerning J.D. Edwards, which PeopleSoft acquired in the summer of 2003, Phillips said Oracle would like those resellers to continue to sell upgrades into the J.D. Edwards network.

"These are a lot of smaller customers we cant reach," Phillips said. "We also would like them to take a look at the Oracle eBusiness Suite special edition, which is our midmarket product." Adding that the special edition became available in the United States four or five months ago, he said Oracle is "still signing up resellers."

/zimages/6/28571.gifClick here to read more about the Oracle eBusiness Suite special edition, which initially launched in China, Europe, the Middle East and Africa.

With regard to partners—particularly those frenetically signed by PeopleSoft over the past several months—Phillips said PeopleSoft will end up introducing a lot of new relationships to Oracle, some valuable and some not.

The big question, however, remained unanswered. When asked about the status of PeopleSofts $1 billion technology alliance with IBM, announced in September, Phillips said Oracle is not even sure of the status of PeopleSofts contract with IBM—or if a contract was ever signed.

At the PeopleSoft Connect user conference in San Francisco this fall, PeopleSoft and IBM made a big-splash announcement regarding the partnership that would have PeopleSofts Enterprise and Enterprise One (JDE) software embedded with IBMs WebSphere software. The two companies also planned to co-develop composite applications, announcing several in September alone.

Next Page: Oracle says its "not that interested in adding more IBM technology" to its stack.