Uneasy Days for PeopleSoft Users

The saga of PeopleSoft Inc. (Nasdaq: PSFT) and Oracle Corp. (Nasdaq: ORCL) looks set to run and run, prompting concern among PeopleSoft's customers.

Specifically, some users are edgy about the future of PeopleSoft's products under an Oracle regime. I would like to see a proper resolution to this situation,” says Clyde Morrell an IT manager responsible for Brigham Young University’s relationship with PeopleSoft. “I don’t care how long it takes.”

Oracle's attempted takeover of PeopleSoft has become one of the IT industry’s top soap operas. In the latest chapter, PeopleSoft shareholders had until midnight EST last Friday to respond to Oracle's $24 a share buyout offer (see PeopleSoft/Oracle: Shareholders Split and Oracle Solicits PeopleSofters).

Within hours of the deadline passing, Oracle announced that more than 60 percent of shares had been tendered, and Oracle officials urged the PeopleSoft board to finally give in (see Oracle Gets Mandate From PeopleSoft and Oracle Battles With PeopleSoft).

But -- surprise, surprise! -- PeopleSoft is having none of it. In a statement released over the weekend, the board members reiterated their stance, claiming that the company is worth more than the $24 on the table. Just to make themselves clear, the board said the company's value beats even Oracle’s previous top offer of $26 (see PeopleSoft Comments on Oracle's Offer ).All this wrangling has created dread among some organizations relying on PeopleSoft's Enterprise Resource Planning software.

Oracle has already said it will support PeopleSoft users for at least 10 years and that it intends to develop a next generation of products called PeopleSoft 9, but Morrell -- whose outfit uses PeopleSoft products for financial, HR, and payroll systems -- wants more detail.

”There are a lot of things we don’t know about what Oracle plans to do,” he says. “We want clarification and an understanding of the needs of customers.”

Another concerned user is Doug Roberts, director of financial planning at the Kentucky Community and Technical College System, which encompasses 16 colleges and 54 campuses across the state.

”We have received some information from Oracle, and their promise is that they will continue to support PeopleSoft, but our obvious concern is about what level that support would be,” he says.With a license to use the full PeopleSoft product suite, Roberts understandably has an eye on the future roadmap. “It’s a question of continuing to develop the product to meet the needs of higher-education users,” he says. ”We would like this thing to be over, but sometimes in the business world, that doesn’t happen.”

So, what’s next? Well, a swift resolution to the situation appears unlikely. Oracle has again extended its offer, stretching the deadline back until the end of this year, and more courtroom battles are on the horizon. The biggest weapon in PeopleSoft’s armory remains the "poison pill" – flooding the market with new shares, thereby making a takeover prohibitively expensive.

A spokeswoman for Oracle declined to provide comment for this article.

— James Rogers, Site Editor, Next-Gen Data Center Forum