PeopleSoft’s Oracle cloud moving

In light of the U.S. Department of Justice’s (DoJ) recent move to block the Oracle Corp. acquisition, the “cloud” that had been hovering over PeopleSoft is thinning, PeopleSoft Canada execs said recently.

“There was a cloud there for a while but it has become thinner and thinner,” said Pete Smith, regional vice-president, PeopleSoft Canada Global Services.

PeopleSoft Canada formally unveiled its new downtown Toronto headquarters in early March. Andy Aicklen, vice-president and managing director for PeopleSoft Canada, noted that with the situation looming practically “over their shoulder,” the company has actually managed to run more efficiently and effectively.

The DoJ announcement marks the official end to the 10-month saga, Aicklen said.

Bolstered by its J.D. Edwards acquisition, Peoplesoft now has a broader array of enterprise application software products and will continue to target the Canadian mid-market, he added.

Since recommending the deal be blocked in February, the U.S. Department of Justice said last week it plans to initiate an antitrust suit to counter Oracle Corp.’s multibillion-dollar hostile bid for rival PeopleSoft Inc.

The Department argues that a successful Oracle bid would strike a blow against competition in the application software market. SAP AG and Oracle would become the top two vendors, leading to higher prices and less innovation, the DoJ charges.

The move presents a huge setback for Oracle. After learning of the decision, Oracle late week released a statement saying it will “vigorously challenge” the lawsuit and is withdrawing a slate of nominees it had put forward for election to PeopleSoft’s board.

Despite earlier reports of customers postponing deals until the situation blows over, both Aicklen and Smith note that it hasn’t been as issue in Canada.

According to Keith Campbell, vice-president finance and CFO for BPB North American Services Inc. in Mississauga, Ont., the fact that PeopleSoft made a commitment to stand by the J.D. Edwards products eased any worries over the Oracle situation,

As a former J.D. Edwards, and now PeopleSoft Canada customer, Campbell noted that the plasterboard manufacturer currently operates within a J.D. Edwards OneWorld architecture with tentative plans to migrate to PeopleSoft’s human resources solution.

But Jim Shepherd, an analyst at Boston-based AMR Research Inc., noted that PeopleSoft at least to some degree has suffered from the proxy battle. Oracle can effectively continue to pursue the takeover without a major drain on its resources. “Nothing has changed, although Oracle may have a tougher road now,” he said.

And rival SAP has also weighed into the debate. SAP, which has a larger applications software market share than Oracle, claims that the suit ignores Microsoft and mid-size vendors currently in this space. Despite steeper odds, Shepherd said Oracle can continue to pursue the transaction, and it can afford the legal bills.

The same is not true of PeopleSoft, he added.

But even if Oracle is successful in court against the DOJ, it still would have to deal with PeopleSoft’s “poison-pill” antitakeover provisions, in which case it would be forced to convince a majority of PeopleSoft shareholders to accept its bid.

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