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At PeopleSoft’s European conference this week, the vendor’s senior executives were keen to point out the progress that the firm has made in the past year, including new services to make updates easier for customers. The main achievements of the past year being highlighted were improved customer satisfaction, an expanded presence in Europe and the successful integration of JD Edwards. PeopleSoft also wished to share its delight at good results for the third quarter, with license revenues in the region of $155m to $165m, total revenues amounting to $680m to $695m, and average deal sizes that were more than $100,000 larger than the previous quarter.

PeopleSoft also provided further details of its newly formed alliance with IBM, with which it will be jointly investing around $1m over the coming five years. Going forward, PeopleSoft will concentrate on further developing its alliances, strengthening its services capability, expanding its geographic presence, optimising its technology solutions by industry and maintaining the upwards momentum of its business results.

But PeopleSoft’s executives refused to be drawn on any questions regarding the departure of its CEO under a cloud last week or the ongoing hostile bid from Oracle. So the only thing to do was to ask its customers what they thought was going on. Most of those that I spoke to claimed that the year since Oracle announced its bid to take over PeopleSoft had been highly distracting and many were convinced that Craig Conway’s departure was connected to the spat with Oracle. And this was certainly not helped by the continued mention of the new CEO’s credentials – namely those of integrity, honesty and respect. Where does that leave Conway?

Without exception, the customers that I polled were unhappy with the potential takeover by Oracle, claiming that its applications do not compare favourably with those of PeopleSoft, especially in the area of human capital management. Most also claimed to have a Plan B ready should the takeover go ahead and would be prepared to rip out their technology implementations and start again with a new vendor should Oracle fail to adequately support PeopleSoft products going forward. However, none had actually stalled their implementations – rather, they were continuing to upgrade their implementations to take advantage of the support that PeopleSoft employees can currently offer them. Almost all had evaluated Oracle’s business applications alongside those of PeopleSoft when originally choosing the technology they would implement – and had already rejected Oracle once.

After originally stating that all PeopleSoft products would be discontinued, Oracle recanted that statement and said instead that they would continue to support all three PeopleSoft product lines for at least ten years. But the expectation at Connect among customers was that Oracle would likely go on a firing spree, leaving few qualified PeopleSoft resources to provide the level of customer support that they are used to getting.

Of course, all of this is speculation and most of the customers did not want to be named. But the news does not bode well for Oracle, should it be successful in its bid for PeopleSoft.

Copyright © 2004, IT-Analysis.com

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