DENVER - Customers of J.D. Edwards & Co. seem to have adopted a wait-and-see approach to PeopleSoft Inc.'s proposed...
acquisition of the business applications vendor. Still, they would like more information about the deal -- and soon -- particularly in regard to how it would affect the long-term life of J.D. Edwards applications.
Clouding things even further, however, is Oracle Corp.'s attempted takeover of PeopleSoft. If PeopleSoft shareholders approve that deal, it would negate the J.D. Edwards merger.
That leaves J.D. Edwards customers, many of whom are gathered this week for the company's annual user event, in limbo.
"I'm not doing too much worrying about it," said Kevin Sullivan, an employee at medical supplies maker Terumo Medical Corp. and an attendee at the conference. His company has at least two years before it will have to consider whether to buy additional J.D. Edwards products.
By contrast, Tom Robbins of Deerfield, Ill.-based pharmaceutical maker Baxter Healthcare, is in the market for management software and is concerned about the proposed merger. Baxter is already running a lot of J.D. Edwards software, but Robbins finds the merger to be a little distracting. "It's something we have to consider [when purchasing the software]," he said.
PeopleSoft's proposed $1.7 billion acquisition of J.D. Edwards would create the world's second largest enterprise applications firm, with 11,000 customers and 13,000 employees worldwide. While both companies make business applications, including enterprise resource planning (ERP) and customer relationship management (CRM) software, analysts expected J.D. Edwards' installed base to benefit from PeopleSoft's expertise in human resources.
But Oracle has other ideas. In a statement, the company said that, if its PeopleSoft acquisition is completed, it will "review whether, and on what terms, Oracle would support the J.D. Edwards transaction."
At a press conference Monday morning, J.D. Edwards executives reiterated their plans to merge with PeopleSoft, an idea they say originated at J.D. Edwards. "We never had a for-sale sign up," said chairman and CEO Bob Dutkowsky.
As Dutkowsky paints it, the merger of J.D. Edward and PeopleSoft would produce a company that can better meet customers' changing needs. Synergies would create better products and services, and little overlap in product lines would mean customers shouldn't worry about losing support for their existing applications. The deal is in customers' best interest, he said.
The purpose of Oracle's proposed takeover of PeopleSoft (Dutkowsky has dubbed it "hostile") is to knock a competitor out of the market, he said. Dutkowsky predicted that either the Department of Justice or the European Commission -- or both -- will block the deal on antitrust grounds. "This is exactly what antitrust laws are supposed to protect against," he said.
On the other hand, J.D. Edwards customers interviewed at the user event aren't so concerned about the macroeconomic effects of these corporate clashes. Most don't seem to have particularly strong feelings on the J.D. Edwards-PeopleSoft merger. They just want to make sure the products they have purchased will be supported.
Charles Steele, of Zimmer Inc., in Warsaw, Ind., said that he is concerned about the longer-term effects of a J.D. Edwards-PeopleSoft merger. If application lines are merged, he asked, would customers have to buy the resulting "new" products? Zimmer has about 1,000 employees using J.D. Edwards' OneWorld ERP software.
But Steele isn't afraid, at least in the short term, that that would happen to J.D. Edwards products. "The size of Edwards' user base is just so large. I don't see that going anywhere soon," he said.
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