SAP says Oracle takeover of PeopleSoft won't work; analyst firm says customers won't even notice

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An increasingly beleagured PeopleSoft has won support from an old enemy who declared that ?It won?t work? for Oracle to buy its rival; but a leading analyst firm says customers won?t notice the difference if Ellison gets his own way.

"The PeopleSoft product is better than Oracle 11i,? said Hasso Plattner, co-founder of SAP at the Sapphire user conference in Florida just hours after Oracle increased its hostile takeover offer for PeopleSoft. "If they want to replace 11i with PeopleSoft, now that would make sense."

But despite this note of support, Plattner?s overall conclusion is downbeat for PeopleSoft. ?Oracle will probably force the PeopleSoft board to accept [the new offer] " he predicted. "Then PeopleSoft will be gone. Is it good for the industry? I don't know. I imagine that the PeopleSoft board will tell Oracle 'no way.' It won't work to buy a company and stop development and offer to replace it with a weaker product."

Despite originally announcing that PeopleSoft products would have no long term life following an Oracle acquisition, Oracle CEO Larry Ellison has been at pains to soften his tone. ?We would save as much money as we could, but we would want to hold onto engineering teams, support engineers and development engineers and keep PeopleSoft products moving ahead and improve the quality of our products,? he said in Washington.

Meanwhile the highly influential analyst firm AMR Research has concluded that PeopleSoft customers probably won?t suffer that much if Ellison takes charge. ?The chances are, most PeopleSoft customers won?t notice much difference if Oracle wins this fight,? said research analyst Randy Weston.

? Oracle has stated that it plans to support these customers with the support staff these customers are now using. It also plans to keep the best PeopleSoft developers on board," he said. " AMR Research believes that the products most PeopleSoft customers are using are likely to remain intact and be built into Oracle?s product line, mainly PeopleSoft?s widely used Human Resources (HR) system and pieces of the financial product.

"While the emotional reaction to this deal may have been strong and tactics of some players brazen, when the dust settles, this isn?t going to be the catastrophe for PeopleSoft customers that has been played up. The best PeopleSoft products will likely remain intact."

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