PeopleSoft chief executive officer Craig Conway has called
Oracle's $5.1bn offer for his company "atrociously bad behaviour
from a company with a history of atrociously bad
behaviour".Industry analysts, while using less dramatic
language, are almost universally agreed that if the bid goes
through, PeopleSoft users will be in for a rough transition.
Gartner analyst Ted Kempf said a merger would
be bad for PeopleSoft's customers.
"I don't think [Oracle is] interested in
developing the products. They just want the support revenue. If
you're a diehard PeopleSoft client, you'd have to migrate to Oracle
or something else."
A Gartner First Take paper on the merger
warned PeopleSoft users that "recently decided to upgrade to
version 8 should reconsider since Oracle will likely provide only
minimal enhancements to version 8".
Analyst group Ovum was quick to warn
PeopleSoft users that have not yet upgraded to version 8 to "do
nothing until the dust settles".
"Oracle's offer to extend the maintenance
period on PeopleSoft 7 beyond the year-end deadline offered by
PeopleSoft itself gives them a welcome breathing space to examine
their options.
"Obviously it would not make sense to upgrade
to PeopleSoft 8 if the merger succeeds, but it would not be obvious
for these [or PeopleSoft 8 users] to migrate to Oracle
eBusiness."
According to Forrester analyst Laurie Orlov,
PeopleSoft customers would face a forced migration if the Oracle
bid succeeds. "Larry Ellison was clear that the move was about
acquiring a new customer base for Oracle's E-business Suite," she
wrote.
"He announced they intent to assign PeopleSoft
top developers to creating migration tools and inserting PeopleSoft
features into Oracle E-Business Suite."
Orlov warned that PeopleSoft customers would
pay heavily for the process. "Oracle will need to fund all of the
R&D required to migrate the PeopleSoft base to the Oracle suite
- and the best funding source will be maintenance revenues.
Customers will be given little choice but to pay, given a shrinking
pool of enterprise app vendors."
IDC analyst Albert Pang thought Oracle would
be sensitive to the needs of PeopleSoft's customers. "They're not
going to abandon more than 4,000 of these blue-chip customers," he
said.
Oracle chief financial officer Jeff Henley was
at pains to reassure PeopleSoft users. "We would support the
PeopleSoft development for a long period of time," he said. "We'll
work to incorporate some of their features into our products, so
that as customers migrate to our products over the years, they
would have everything there, plus more, in the Oracle product."
The president of the US-based Oracle
Applications Users Group also backed the deal.
"Oracle's offer to purchase PeopleSoft would
have a positive long-term impact on Oracle applications users,"
said Arthur Hunt, through a spokesman. "We would expect the
purchase to expand Oracle's ability to produce new applications
(and) improve existing ones."