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PeopleSoft Forges On; Oracle App Sales Down

Both vendors try to maintain business as usual in wake of antitrust ruling

Tony Kontzer

September 17, 2004

3 Min Read

Less than two weeks after U.S. District Judge Vaughn Walker gave Oracle an important victory over the Justice Department, PeopleSoft Inc. is determined not to let the court decision in the antitrust trial get in the way of its business. The software vendor plans to make a series of product announcements at its Connect user conference in San Francisco this week to what it says will be a crowd of customers who want to know what to expect next.

It's "business as usual" at PeopleSoft, Bergquist says.

It's "business as usual" at PeopleSoft, Bergquist says.

"What [customers] have said is, 'I've got a business to run,'" says Rick Bergquist, chief technology officer at PeopleSoft. "In some ways, it's business as usual."

The company will report on results customers are getting from its Total Ownership Experience project, unveiled 15 months ago and aimed at delivering tools to reduce the time and expense related to application rollouts, upgrades, and maintenance. PeopleSoft will introduce enhanced upgrade tools, a Web-services repository, and a new version of its human-resources software that will make it easier to track contractors and temporary workers, as well as full-time employees. It also will detail a tweak to manufacturing software it inherited in last year's acquisition of J.D. Edwards & Co., adding support for increasingly popular demand-driven manufacturing.

Despite the specter of Oracle's takeover attempt, customers say they remain interested in PeopleSoft's technology advances. Agricultural equipment maker AGCO Corp. has made it a point not to factor Oracle's takeover attempt into its technology decisions, says Howard Love, IT manager at AGCO, which became a PeopleSoft customer thanks to its acquisition of J.D. Edwards in August 2003. AGCO is open to expanding its investment in PeopleSoft products, which it uses to run manufacturing and financial systems, Love says. "We can't run our business out of fear of what might happen. We have to deal with what's happening."

Some IT staffers from Santa Clara University in Silicon Valley will be at Connect to learn more about the HR module and a similar update to PeopleSoft's student-administration app, CIO Ron Danielson says. But the school, which uses PeopleSoft software for running student-administration, human-resources, and financial systems, isn't planning any new investments in PeopleSoft products. One thing Danielson doesn't expect to get at Connect is a lot of insight into the fate of PeopleSoft. "Why would customers expect that anyone's going to give them a better answer than they've been getting for the last year?" he asks. "I don't think PeopleSoft knows exactly what it's going to do."

With the Justice Department hurdle cleared, and the poison pill PeopleSoft adopted likely to be ineffective, PeopleSoft's fate is sealed--to an extent, says Josh Greenbaum, an analyst with Enterprise Applications Consulting. The best chance it has to deflect Oracle's tender offer is to find another buyer that would keep the company independent. "They need a white knight, and they need one fast," he says.

PeopleSoft may need a white knight as much as Oracle needs PeopleSoft. On the heels of its victory, Oracle last week reported first-quarter earnings that, while exceeding estimates, were dragged down by disappointing applications sales, highlighting the strategic importance of its acquisition attempt. But even Oracle was espousing a business-as-usual philosophy. Hopes are high for the vendor's pending 11i.10 E-Business Suite release, president Chuck Phillips told analysts on a conference call, and salespeople are being asked to focus on articulating the benefits of Oracle's E-Business and collaboration suites rather than thinking about PeopleSoft.

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