J.D. Edwards: Oracle bid a non-issue

J.D. Edwards & Co. earlier this month reaffirmed its commitment to merge with enterprise software provider PeopleSoft Inc., and called into question Oracle Corp.’s recent attempted hostile takeover bid of PeopleSoft.

During a media briefing at its Quest Global 2003 user conference, J.D. Edwards president and CEO Bob Dutkowsky challenged Oracle’s “commitment to customer choice,” and suggested that Oracle’s move would violate U.S. antitrust laws.

“Oracle’s attempted hostile takeover of PeopleSoft in no way affects our resolve to move forward with the PeopleSoft/J.D. Edwards merger and create the world’s second largest enterprise application software company, Dutkowsky said.

He added that Oracle’s “financially motivated” consolidation bid for PeopleSoft would reduce competition and customer choice.

“At no time was J.D. Edwards ever for sale,” Dutkowsky said, adding that the decision by Denver-based J.D. Edwards to be acquired by PeopleSoft was a “conscious business decision” that involved eight months of “careful reasoned study” and negotiations that began in the fall of 2002.

On June 2, J.D. Edwards entered into a US$1.7 billion definitive agreement to be acquired by PeopleSoft. Four days later, Oracle placed a US$5.1 billion bid for Pleasanton, Calif.-based PeopleSoft in a move designed to boost earnings and enhance future versions of its own eBusiness Suite.

PeopleSoft’s products largely target the service industry (larger enterprises including telecom, health care, financial and education) while J.D. Edwards traditional focus has been the mid-market manufacturing and distribution verticals – the “exceedingly complementary” merger means the companies can achieve more together than as separate entities, Dutkowsky said.

“We fit together because both companies are customer-centric, customer-driven and customer loyal,” Dutkowsky said, making a not-so-subtle dig at Oracle.

He pointed to earlier statements by Oracle that it would discontinue selling PeopleSoft’s products to new users while encouraging migration to Oracle applications, and dismissed reports that Oracle would offer a free upgrade to PeopleSoft customers.

“Free is never free,” Dutkowsky said, adding the enterprise customers would ultimately have to incur implementation and training costs.

Recently, Oracle has had varied success wresting applications business away from PeopleSoft. Together, PeopleSoft and J.D. Edwards – with a combined total annual revenue of US$2.8 billion, 13,000 employees and 11,000 customers – would likely heighten competition between rivals Oracle and business applications vendor SAP AG.

The buzz surrounding the merger threatens to overshadow the new software solutions that J.D. Edwards rolled out as part of its product road map at its Quest user conference this month.

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