The Pieces Fall Into Place - InformationWeek

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Software // Information Management
Commentary
10/28/2004
12:06 PM
Valerie Potter
Valerie Potter
Commentary
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The Pieces Fall Into Place

All the pieces seem to be falling in place for Oracle's hostile takeover bid for PeopleSoft.

All the pieces seem to be falling in place for Oracle's hostile takeover bid for PeopleSoft. The PeopleSoft board's recent firing of CEO Craig Conway removed the most outspoken opponent of the deal within the PeopleSoft organization. (Shed no tears for Craig. His severance package reportedly came to $18 million.)

Oracle announced this week that it has extended its $7.7 billion offer until midnight Nov. 5. Although Oracle execs have hinted they might lower the offer price, for now it remains at $21 a share.

But the big news is that European Union antitrust regulators on Tuesday gave Oracle the go-ahead to acquire PeopleSoft, which eliminates almost the last of the deal's major stumbling blocks. Oracle is still awaiting a decision in its lawsuit to remove PeopleSoft's "poison pill" takeover defenses, and PeopleSoft shareholders may hold out for a higher bid. (Ironically, PeopleSoft saw profits rise this quarter for the first time in a year.)

Nevertheless, most signs point to the deal going through. If all goes as Oracle plans, PeopleSoft customers will eventually have to switch to Oracle applications, databases, and app servers -- and, of course, thousands of PeopleSoft employees are likely to lose their jobs. Well, boo hoo, says Network Computing editor-in-chief Rob Preston in an opinion piece entitled Oracle, PeopleSoft And The Future. Pain and suffering accompany any corporate fight, but in the long run it's better to let free enterprise reign than to rely on the government to make business decisions, he argues.

What's more, says Preston, Oracle's takeover bid has been good for the industry: "Larry Ellison's intent may be to create a software juggernaut, but he also has put every enterprise-application vendor on high alert: Innovate or be pushed aside." He cites PeopleSoft's new partnership with IBM, Microsoft's push to roll out major upgrades to its four main enterprise-software suites, and SAP's moves into the app server and Web services space as positive reactions to Oracle's bid.

Would an Oracle takeover of PeopleSoft be good for the industry by sparking innovation from competitors, or do the consequences for PeopleSoft customers and employees outweigh those arguments? How would the takeover affect your job in the future? Drop me a line and let me know what you think.

Valerie Potter is pinch-hitting for Richard Hoffman as editor of Database Pipeline this week.

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