BOSTON -- On the day Oracle Corp. upped its offer for rival software maker PeopleSoft Inc., the company's executives reiterated their belief that shareholders would approve the deal and plodded on with new products, unveiling a new marketing automation package.
Oracle vice president for CRM marketing Robb Eklund yesterday said his company is very serious about completing its bid for PeopleSoft, Pleasanton, Calif. Earlier Wednesday morning, Redwood Shores, Calif.-based Oracle raised its cash offer for PeopleSoft from $16 per share to $19.50 per share, bringing the total value of the deal to $6.3 billion.
"I think the offer speaks for itself," said Eklund, who spoke with SearchCRM.com at DCI's CRM conference yesterday. "This is a good deal for PeopleSoft customers, who will receive extended product support, and for PeopleSoft shareholders, who are looking at a substantial cash offer from a more viable company."
Eklund said that Oracle shareholders would also benefit from a larger, stronger company if the deal were accepted. Oracle users would remain relatively unaffected by the deal, he said.
For its part, PeopleSoft issued a statement encouraging shareholders to take a wait-and-see approach until the company's board of directors, which condemned Oracle's initial offer, can review the new bid and make an official recommendation. On Thursday morning, PeopleSoft issued a news release stating it was continuing with its plans to buy Denver-based J.D. Edwards & Co., basically ignoring Oracle's demand that it put the skids on the deal.
Oracle also unveiled its latest marketing automation software package, available at the beginning of next week. Eklund said Oracle Marketing has been significantly revised with the focus on helping customers tie revenue opportunities directly to marketing campaigns. Among the upgrades are more powerful analytical tools, personalized dialog applications for sales and marketing, and centralized content management controls.
Eklund said Oracle is intent on delivering more usable analytical tools to workers outside of IT. An example of this resides in the offering's re-engineered customer modeling capabilities, which Eklund said make it easier for non-IT users to predict which customers will respond most positively to marketing campaigns.
Oracle officials said that at least one customer, 1-800-Flowers.com, is already deploying the new package.
Industry experts said Oracle's increased offer for PeopleSoft shows that the firm is indeed serious about closing the deal. Barton Goldenberg, president of Bethesda, Md.-based CRM consultancy ISM Inc., said the new offer is at a level where PeopleSoft CEO Craig Conway will be forced to consider it seriously. Goldenberg said the offer of $19.50 per share also eliminates the threat of PeopleSoft invoking a "poison pill" contingency plan to avoid a buyout.
"I'm still not sure that shareholders will approval the deal because most can see that PeopleSoft is a much hotter company than Oracle right now," Goldenberg said. "PeopleSoft has better CRM products than Oracle, so it would seem that selling out to Oracle now might be a big mistake down the road."
Goldenberg said he isn't sure Oracle CEO Larry Ellison would shelve all of PeopleSoft's CRM products, as he has threatened to, since they are currently superior to Oracle's offerings. Goldenberg said he believes such a move would be damaging to the CRM market overall.
Some Oracle customers attending the DCI CRM conference said the proposed deal would benefit CRM users if completed. David Rudzinsky, vice president of information systems at Bedford, Mass.-based medical device manufacturer Hologic Inc., said he feels that elimination of PeopleSoft from the market could prove fruitful.
"I'd have to view it as a positive. To me, fewer players means greater standardization, and that helps ease integration issues with partners, suppliers and customers," Rudzinsky said.
Rudzinsky said Hologic seriously considered PeopleSoft CRM before buying Oracle software but didn't see major differences in the applications. Hologic went live with Oracle CRM and ERP applications in November 2002.
Rudzinsky said he does not believe the merger would negatively impact CRM industry pricing, but he noted that he would be concerned if Oracle eliminated all of PeopleSoft's support team.
"My main concern throughout all of this is that Oracle remains focused on business and its customers," said Rudzinsky. "But one thing I'd tell Oracle is not to fire all the smart people they inherit from PeopleSoft. They'd need to retain some of that talent at least; they're going to need it in the future."
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