No white knight coming to rescue PeopleSoft, says Gartner

Anyone looking around for a white knight to ride to PeopleSoft's rescue in its defence of the hostile takeover bid from Oracle should think again - there's no-one out there likely to take up the mantle according to Gartner Group.

After examining possible alternative buyers, Gartner concluded that the current positions of other vendors in the infrastructure and application markets makes them unlikely white knight candidates. "After examining the opportunities for these other vendors, we believe PeopleSoft and JD Edwards prospects and users should consider a 'white knight' scenario as a low probability when considering their options," said Betsy Burton, vice president and research director for Gartner. "However, most vendors' strategies will be impacted by this pivotal event in the next two years. Applications users should accordingly evaluate if and how, in light of this event, their current providers will support them."

Gartner analysts said companies can't sit on the sidelines and wait for the decision on these acquisition activities. Companies must use this time to evaluate the best course of action regardless of the merger outcome. "While uncertainty lingers, Gartner has been advising clients to not simply stop all PeopleSoft and JD Edwards deployment activities," Burton said. "Assess your risk tolerance, coupled with your assessment of the likelihood that Oracle will complete the PeopleSoft acquisition. Once understood, if appropriate, take specific action based on where you are in the application life cycle."

But whatever the outcome of the Oracle bid, Gartner predicts no change at the top of the market. "In 2002, SAP accounted for 19.6 percent of worldwide enterprise application software (EAS) new license revenue," said Tom Topolinski, vice president for Gartner's worldwide software applications research group. "While Oracle attempts to acquire PeopleSoft, and PeopleSoft tries to attain JD Edwards, neither acquisition would be able to replace SAP's leadership position, based on 2002 new license revenue."

Meanwhile attorneys general from 30 US have ramped up their review of Oracle's $6.3 billion bid with the signing of confidentiality agreements to enable them to share information on Oracle, PeopleSoft and JD Edwards among each other and with the Department of Justice.


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