Oracle Exec Tries To Reassure PeopleSoft Customers

Oracle wants to set the record straight on what it plans to do with PeopleSoft Inc.'s applications if Oracle's takeover attempt, launched two weeks ago, succeeds. A takeover would not mean that PeopleSoft's applications would be discontinued or that PeopleSoft customers would be forced to migrate to Oracle's own applications.

"We want to let PeopleSoft customers know that we are not killing their product. We are not saying they have to migrate," Oracle executive VP Charles Phillips said in an interview Wednesday. "The key message is that PeopleSoft customers get to keep doing what they're doing."

The promise of good intentions was part of an Oracle counteroffensive to PeopleSoft's anti-takeover maneuvers earlier in the week. Oracle also raised its acquisition bid to $6.3 billion from the original offer of $5.1 billion and filed suit against PeopleSoft and J.D. Edwards & Co. officials, charging, among other things, breach of fiduciary responsibility to PeopleSoft's shareholders.

Among the benefits to PeopleSoft's customers of an Oracle acquisition would be around-the-clock support in all parts of the world, said Phillips, who joined Oracle in May after covering the company as a top software-industry analyst with Morgan Stanley. Some of the best features from PeopleSoft's applications might also be ported over to Oracle's E-Business Suite, he said. And Oracle would continue supporting version 7 of PeopleSoft's applications beyond the end of this year.

But Oracle doesn't plan to continue full-scale development of PeopleSoft 7 or the latest version of the suite, PeopleSoft 8—and there's the rub. Oracle's commitment to PeopleSoft applications would be primarily for maintenance and bug fixes. "As far as new enhancements, functions, and modules we may be thinking about over the next two years, those are going to show up in [Oracle's] E-business Suite," Phillips said.

That means customers ultimately would be stuck with an aging platform in maintenance mode or eventually move to another suite if they wanted something more contemporary. Phillips counters that's a choice all IT users are faced with anyway. "In any product line, there's the issue of obsolescence," he said. "Some migration is unavoidable."