PeopleSoft’s ongoing saga

The PeopleSoft/Oracle situation was the subject on everyone’s mind at PeopleSoft’s recent Connect 2004 user conference in San Francisco; so naturally it was also the first issue that Craig Conway addressed in his keynote.

“Have you ever had a bad dream that just didn’t seem to end?” the PeopleSoft chief executive officer quipped, to the seeming appreciation of more than 15,000 customers and partners. Little did he know his Oracle-dominated “bad dream” was about to come to an abrupt end. Ten days later the company’s board of directors fired him. On Oct. 1 he was replaced by Dave Duffield, PeopleSoft’s founder and chairman.

Conway’s dismissal was due to a “loss of confidence” in the CEO’s ability to lead PeopleSoft, the Pleasanton, Calif., company said in a statement.

At the time, in San Francisco, Conway’s “bad dream” was pointedly referring to the 15-month saga that is Oracle Corp.’s hostile takeover bid for the ERP vendor. The all-cash tender offer to PeopleSoft’s shareholders currently has an estimated value of US$7.7 billion. A recent U.S. court ruling dismissed Department of Justice’s (DoJ) attempt to quash the transaction on antitrust grounds.

This does not mean that PeopleSoft will be acquired by Oracle, Conway said. Conway claimed PeopleSoft users are strongly against Oracle’s campaign and reeled off several points to calm fears. He noted that Oracle still needs to garner enough of PeopleSoft’s shareholders to eliminate its “poison-pill” and take over its board. The DoJ can still file its own appeal and the European court has yet to make a ruling regarding the bid. Conway said that for legal reasons he could not comment, but said the salient points of the deal were public record.

Despite the Oracle cloud, PeopleSoft has made progress in the past year, Conway said, and pointed to the “successful” acquisition of former ERP rival J.D. Edwards & Co. and the enhancements made to the JDE World and EnterpriseOne software solutions.

Canadian users at Connect didn’t seem concerned over the ongoing saga. Attendee Janice Paget, a Calgary-based director of controllership at WestJet, said the Oracle situation isn’t on the airline carrier’s radar. The firm recently incorporated EnterpriseOne real-time financial reporting, commitment accounting, budget tracking and capital approvals technology.

As long as the technology is working and the support is there, it’s not really an issue, Paget said.

This sentiment was echoed by Don Beaton, director of financial information management systems for the Regional Municipality of Durham in Ontario. The organization is currently upgrading to PeopleSoft Enterprise Financial Management 8.8 from 7.5 and to Human Capital Management 8.8 and also has Oracle at the back end. The streamlined HR and payroll processing is saving the company about $7 million, according to JoAnne Cermak, the organizations’ director of finance. PeopleSoft has been good in keeping the organization abreast of new happenings, Beaton said, adding he’s not overly concerned.

Gary Ouellette, a system administrator for London Hydro, noted that the Oracle state of affairs won’t be an issue as the London, Ont.-based energy provider completes a migration from World to EnterpriseOne. “This migration was apparently the first such migration in the world,” Ouellette said. “It was scary smooth.” London Hydro is looking at getting into Web-based processing so it brought him to Connect. The company’s IT environment consists of Unix/Oracle platform, which is why London Hydro wants to switch to EnterpriseOne from World running on AS/400, Ouellette said.

“We’re in a stable environment right now and really don’t have any fears. We don’t believe that any future activity with Oracle is going to impede what we’re doing right now,” Ouellette said.

PeopleSoft made a host of announcements at Connect, most notably a new enterprise-applications alliance with IBM Corp. The multi-year US$1-billion deal means PeopleSoft will standardize its apps on IBM’s WebSphere open-standards based middleware platform (including IBM’s Java application server, portal, and business process integration software) with both firms marketing the joint products.

Industry observers note the strategic joint venture has the potential to make any future Oracle acquisition tricky since PeopleSoft’s applications will be integrated with IBM technology. The PeopleSoft/IBM combination effectively provides PeopleSoft with a middle-tier solution for handling application development deployment, data management, integration and workflow. That said, according to Toronto-based Warren Shiau, a software analyst Toronto-based IDC Canada Ltd., the announcement is a good move for both PeopleSoft and IBM.

“The tighter PeopleSoft’s apps are to a middle-tier software offering like IBM’s, the better PeopleSoft is going to be able to compete against SAP’s build-out down-the-stack with NetWeaver and against Oracle’s database-middle-tier-apps stack,” Shiau said.

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