Another day, another twist and turn in the battle royal for control of the runner-up slot in the applications market. The official deadline for Oracle’s takeover offer for PeopleSoft to expire is still early July, but several weeks into the campaigning and propaganda assaults, it’s becoming more and more apparent who’s having a good war – and who’s set to end up as the Iraqi Information Minister.
Let’s start with the main protagonists – Oracle CEO Larry Ellison and his counterpart – and one time employee – PeopleSoft CEO Craig Conway. From where I’m sitting, Conway is not playing this one particularly well, in PR terms at least. Ellison makes the point that its shareholders who own public companies, not CEOs and in light of that the refusal of the PeopleSoft board to even meet with Oracle executives seems to be PR mistake.
The grudging acceptance in formal statements that the Oracle bid will be considered (with the implicit “and rejected” hanging in the air) sits uneasily with Conway’s childish insults that Oracle is a sociopathic company. He’s used that one for years – much to Ellison’s amusement. As for Conway’s claim that Oracle is “atrocious”, well, he should know – he spent long enough working there himself.
Ellison on the other hand is playing a good hand, doubtless ably assisted by the hugely capable Chuck Phillips, ex of Morgan Stanley and whose fingerprints are all over this one.
The bullish declarations that PeopleSoft products had no future was a mistake – and denying that this was ever said is not really going to work, Larry – but there’s been an effective damage limitation campaign put in place.
The ten year support pledge for PeopleSoft products is a good move, although one that will stick in the craw of Oracle’s own 10.7 customers who had to fight Ellison all the way not to be bounced up on to 11i late last year. The no-cost transfer over to Oracle eBusiness Suite takes a lot of wind out of the claims from PeopleSoft that customers will pay through the nose if Oracle wins – although it’s probably a good idea if we all check the small print on the Oracle offer pretty carefully.
Ellison’s also benefiting from the moral high ground. He wants to talk to PeopleSoft’s management team, businessman to businessman, but they are petulantly refusing. What can he do when faced with intransigence like that, he asks innocently? Personally I’d pay good money to be a fly on the wall if Conway and Ellison ever end up in the same room together, but since that seems as unlikely as Bill Gates deciding open source software is a great idea I guess we’re not likely to see that happen.
JD Edwards Bob Dutowsky is actually putting up a better fight than Conway. At its user conference in Denver a couple of weeks ago, he was feisty and combative with JD Edwards firing off the first legal salvo at Oracle when PeopleSoft appeared to back away. Oracle’s removal of its objection to the PeopleSoft/JD Edwards merger is an interesting move – although if Oracle then acquires the joint company that results, Ellison will surely strip out the AS/400 side of the business and sell it off to someone else.
So what about the onlookers. Well, SAP is having a good war, watching contentedly from the sidelines – maybe too contentedly. Rising above the squabbles of the lesser companies has worked so far and reinforced its status as market gorilla, but a combined Oracle/PeopleSoft would be a powerful force in the mid-market which is going to be crucial – and difficult to capture space for SAP in the next few years. There should be a few concerned frowns behind the public smiles of indulgence at SAP.
On the other hand, Tom Siebel should be down on his knees thanking his former boss Ellison for stirring up all this trouble. The silence from the Siebel camp on this entire debacle has been deafening. Surely the not normally reticent Mr Siebel would have some contribution to make to the debate?
Well, probably, but on the other hand while we’re all busy concentrating on the Oracle/PeopleSoft front line, the spotlight has not been turned on the slump in Siebel’s fortunes and its recent unseemly spats with its own shareholders, giving Tom and his team time to turn around the company and get their corporate act back together.
Actually one analyst last week suggested that Siebel could come out of this as one of the unexpected winners, arguing that Siebel might be the white knight that PeopleSoft needs. A Siebel-PeopleSoft merger would rescue PeopleSoft from Oracle’s grasp and give Siebel a fleshed out suite of applications outside of the CRM arena.
It’s a nice idea, but highly unlikely and seems to me entirely dependent on whether Siebel and Conway jointly hate Ellison more than they dislike each other – and I wouldn’t like to call that one either way! The management clashes between the Siebel and PeopleSoft executive teams would be enormous and divisive.
So with the July deadline looming, it’s still hard to pick the winner in all this. Personally I still think the Oracle-Soft option is the most likely with the JD Edwards business thrown into the mix in some form or another. Oracle has upped its offer to the PeopleSoft shareholders and like it or not, PeopleSoft is going to have to let them have their say.
Ellison seems to me very much in charge of this war, with PeopleSoft reacting badly on the defensive. It could still all go into meltdown of course – and the arrival of a new combatant with an offer to screw up Oracle’s plans s still possible. For customers, the only thing to do is sit and wait and watch – which isn’t going to do any vendor’s revenue stream in the current quarter any good…