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Home > CRM / Call Center News > Oracle bid for PeopleSoft sends message to CRM users |
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Industry experts were shocked by Oracle Corp.'s sudden move Friday to acquire rival enterprise applications maker PeopleSoft Inc., and analysts said users are likely to be fretting over the outcome of the buyout bid. Oracle CEO Larry Ellison said in a teleconference that if the attempt to buy out PeopleSoft, Pleasanton, Calif., were successful, his company would support existing PeopleSoft products for an undetermined length of time. However, Ellison made it clear that the long-term goal of the deal is to shift current PeopleSoft customers onto applications made by Oracle, Redwood Shores, Calif. The Oracle offer comes only days after PeopleSoft announced plans to buy rival software maker J.D. Edwards & Co., Denver. Ellison also detailed plans to merge PeopleSoft and Oracle developers into one unit if the deal is completed. Ellison said product overlap was one of the major catalysts for the proposed acquisition. According to industry watchers, the bid is a clear-cut attempt on the part of Oracle to buy market share in enterprise markets including CRM. Kelly Ferguson, principal analyst at Sterling, Va.-based Current Analysis, said she was "shocked" by the bid and said PeopleSoft CRM users would appear to have little control over the fate of their existing investments if the acquisition is consummated. "Oracle will have to support PeopleSoft CRM for some period of time, but it doesn't appear they want to do so for very long," said Ferguson. "PeopleSoft users are going to face a tough decision as to whether they want to get on board with Oracle or look elsewhere." While Ferguson said she sees completion of the deal as "far from certain," she believes users should begin looking at their alternatives as soon as possible. Steve Bonadio, senior program director at Stamford, Conn.-based Meta Group, said he was surprised by Ellison's immediate position of de-emphasizing PeopleSoft product support. "The fact that Ellison came out and said Oracle won't support PeopleSoft technology so quickly really flavored the whole announcement to me," said Bonadio. "PeopleSoft has invested so heavily in development and, clearly, there are a lot of users out there with sizable time and money in their PeopleSoft implementations; his comments were a real red flag." Bonadio pointed out that an estimated 50% of PeopleSoft's CRM customers have upgraded their implementations over the past year and said the reality of being forced to re-implement again, if Oracle completes the deal, would have a dramatic impact on customer planning and spending. Both analysts agreed the deal would make Oracle a more formidable competitor against the likes of Siebel Systems Inc. and SAP AG in the CRM market. However, the experts recognized that, while turmoil around the deal exists, the two largest CRM software makers should be able to cash in. "There's no doubt that the short-term confusion would benefit SAP and Siebel," said Bonadio. "There would be a dramatic effect on the current flow of deals." Both experts also questioned how the proposed deal would impact PeopleSoft's bid for J.D. Edwards and the long-term viability of that company as a result. FOR MORE INFORMATION: Article: Oracle launches takeover bid for PeopleSoft How do you think this acquisition would affect you? E-mail your thoughts to Matt Hines, news writer
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