Oracle fields PeopleSoft customers' questions in online meeting

Oracle took its takeover case straight to PeopleSoft customers in an online townhall meeting.

Oracle took its takeover case straight to PeopleSoft customers today with promises of continued product suppor

t.

In a town meeting-style conference call, Oracle executive vice president Chuck Phillips fielded a host of questions ranging from the cost of support for old PeopleSoft products to the future of J.D. Edwards' software, given PeopleSoft's pending acquisition of J.D. Edwards & Co.

Many of the questions centered on the nuances of how the company would handle support, though it was difficult to gauge the tone of the questions since they were submitted via e-mail.

"We recognize the substantial investments you made in your PeopleSoft implementations," Phillips said. He cited the purchase of the RDB database from Digital Equipment Corp. in 1994 as an example of how Oracle supports applications after acquisition.

The fate of the RDB database would have been murky if it remained at Digital, which was bought by Compaq and then Hewlett-Packard, Phillips said. "It probably would not be a high priority for HP," said Phillips, who added that Oracle secured its future.

"People are still running enterprise applications on RDB today and we are supporting that."

While Oracle would no longer market PeopleSoft products, it will continue to support them because maintainence is profitable, Phillips said. "You make money off supporting customers," he said.

Oracle figures it will make enough off supporting PeopleSoft applications to enhance them better and continue support longer than PeopleSoft could, Phillips said. He also said the company expects to continue the present cost of PeopleSoft support in customers' contracts.

If PeopleSoft's purchase of J.D. Edwards, which may close as early as today, is completed, then Oracle would continue to support both companies' products, Phillips said.

In an attempt to fight off the takeover, PeopleSoft has built a clause into its new customer contracts refunding money if the acquisition takes place. "It's a moot point," Phillips said. "We don't plan to do anything whatsoever to trigger the conditions in the contracts. We will continue to provide worldwide support."

While Oracle pledges to continue support for PeopleSoft products, it's offering a free license swap for those who migrate to Oracle E-Business Suite. Phillips said the company would consider incentives and consulting services for customers who want to migrate faster. The Oracle database required to run the free Oracle applications would have to be purchased, he said.

In a similar vein, Phillips was quizzed about how Oracle will deal with customers who continue to run their PeopleSoft applications on non-Oracle databases. For example, PeopleSoft recommends running its software on IBM's DB2 database.

"We are now involved with multi-vendor support for our customers today," Phillips said, noting support issues often require competing vendors to work together. The acquisition of PeopleSoft would bring its support staff into the Oracle fold, which would aid product support.

Today's meeting is part of the public relations campaign Oracle is waging to curry customer favor. Their support is only one piece of the deal. The fate of the acquisition is still in the hands of PeopleSoft shareholders and antitrust regulators who have asked Oracle for more information about the deal.

Phillips said the extra time for the Department of Justice isn't unusual because of the complexity of the industry and the size of companies involved. "It's understandable that they need more time," he said.

Oracle's current offer for PeopleSoft expires Aug. 15.

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