PeopleSoft Inc. has decided to offer a customer assurance program which would guarantee a refund of up to five times the purchase price of all PeopleSoft software, should the company be acquired.
The company initially offered the program during its first quarter ended June 30 and had such positive feedback that it decided to offer it again during its second quarter. It considers the offer to be an added bonus to customers, who have been unsure of their options since Oracle Corp. announced an unsolicited tender offer for PeopleSoft in early June.
“It caused a lot of disruption among customers…Oracle initially went out and said they were going to discontinue the PeopleSoft product line, they were going to migrate everybody to the Oracle E-Business suite and they were going to retain only the best PeopleSoft developers,” said Steve Swasey, spokesperson for PeopleSoft in Pleasanton, Calif. “That caused a considerable amount of concern among PeopleSoft customers.”
Swasey said the company needed to provide assurance to customers that were in the development stage of acquiring PeopleSoft products, especially when there was “a lot of threatening language put out by Oracle about the future of PeopleSoft products.” He added that the software company wanted to let customers know that their investments would be viable over the long term.
“So, we came up with a program called the customer assurance program, which, at no cost ever to PeopleSoft would ensure that customers would have the software that they bought [would be] functioning and developed and improved over years if the company was acquired,” Swasey said.
The program was not intended to be a defence mechanism against Oracle’s hostile take over offer, but rather a benefit to PeopleSoft customers, he added.
“[It’s] an added level of security, an added level of assurance of confidence that PeopleSoft is the company that customers want to do business with,” Swasey said.
He added that if PeopleSoft were to be acquired by Oracle, the cost of the customer assurance program – approximately US$391 million – wouldn’t make that great an impact on an acquisition priced at US$7.5 billion.
Also on Friday, Swasey said PeopleSoft acquired the last remaining outstanding shares of J.D. Edwards.