Ellison Tries To Allay PeopleSoft Customers' Fears

Oracle CEO Larry Ellison sought to quell the fears of PeopleSoft Inc. customers by insisting that PeopleSoft applications would receive the same support that owners of Oracle's own applications receive, if his company succeeds in acquiring PeopleSoft. "We're going to oversupport PeopleSoft customers," Ellison said Wednesday in a question-and-answer session with conference attendees after his keynote address to Oracle OpenWorld attendees.

Rather than immediately discontinue PeopleSoft applications, Oracle will bring to market version 9.0 of PeopleSoft's software, which is under development. "We'll do as good a job as we know how" to bring PeopleSoft 9.0 applications to fruition, he said.

He conceded implicitly that no further versions of PeopleSoft applications would be produced after version 9.0 because the PeopleSoft engineering staff, if the acquisition were consummated, would be switched over to working on future versions of Oracle applications. For the first time, Ellison said Oracle's next-generation applications would be "a functionality-merged set of products," combining Oracle and PeopleSoft features and supplying a "graceful" upgrade path for both Oracle and PeopleSoft customers.

Ellison claimed that building next-generation applications will require "a greater investment than PeopleSoft could do independently." Oracle's plans to develop such an application set will give the company the competitive means to "go after SAP," the market leader in enterprise-resource-planning applications, he said.

But to do that, Ellison said, Oracle "needs more customers and more engineers," and that's why it has continued to pursue its PeopleSoft bid. Recently, PeopleSoft stockholders tendered 60.8% of their shares to Oracle, but the company may have to stage a takeover attempt of PeopleSoft's board of directors, which has enacted a poison-pill defense against the Oracle bid.

In other comments, Ellison predicted that IT staffs will overcome their No. 1 problem, information fragmentation, by consolidating many small databases into a few large databases. Oracle itself has done so over a period of five years, and Ellison argued that Oracle customers can do the same by instituting data hubs.

Nearly a year ago, Oracle launched a customer-data-hub product that's designed to sit in front of multiple databases and consolidate information. Oracle is expanding that product's capabilities and will bring out additional specialized data hubs, such as a Product Data Hub and a Citizen Data Hub for government.

"Had there been a terrorist data hub, Mohammed Atta [the ringleader of the Sept. 11, 2001, terrorist attacks] might have been arrested and detained," instead of boarding a plane and flying it into the World Trade Center, Ellison said during the question-and-answer session.

In the future there will be health-record hubs so that multiple health-care providers can access a patient's records, Ellison said. He realized some people may not want to see such hubs emerge for privacy reasons, but they will have the option to opt into the hub or opt out, he argued. Those who opt out, however, may find "their current set of records have been lost. You can't get more private than that."

Data hubs working in front of large, consolidated Oracle databases are likely to be powered by grids of rack-mounted servers, simplifying administration problems and substituting standardized systems for complexity. Ellison said Oracle is concentrating on bringing out the right management tools and building in sufficient control mechanisms to make such computing architectures possible.