PeopleSoft CEO blames Oracle for poor sales

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PeopleSoft CEO blames Oracle for poor sales

PeopleSoft chief executive officer Craig Conway has blamed Oracle's lingering takeover campaign for lost and delayed sales.

When Oracle finally backs off, "some amount of deals that have been held or deferred will be released", Conway said.

PeopleSoft's first-quarter revenue of $643.1m fell slightly short of analyst expectations, marking the first time the company has missed estimates since Oracle launched its takeover bid last June.

Several large deals closed just after the quarter ended, and PeopleSoft expected business to pick up in coming quarters.

He also pointed a finger at Oracle when asked by an analyst how many customers are delaying buying decisions until the takeover tussle is resolved, Conway declined to provide an estimate.

"It's a moving target, but it's always a positive number," he said. "The list continues to grow, but some of those deals can't wait. They close for our competitors."

SAP reported a 45% increase in its US business in the first quarter. Conway cited SAP as PeopleSoft's primary rival and said that while SAP gobbled up US deals, PeopleSoft had a particularly strong quarter in Europe, the Middle East and Africa.

Still, Oracle's bid continues to suck up PeopleSoft's resources. Although analysts said that Oracle has little chance of acquiring PeopleSoft, thanks in large part to an antitakeover provision in PeopleSoft's bylaws known as a "poison pill", Oracle has persisted in its $9.4bn cash offer to PeopleSoft's shareholders for control of the company.

Chief financial officer Kevin Parker said PeopleSoft had spent $55m to date fending off Oracle's advances and will spend another $10m to $12m next quarter, when PeopleSoft, for the first time, will exclude the costs of its battle with Oracle.

"We've gotten to the point where we've got to make choices between paying our lawyers and trying to run the business," he said. Excluding Oracle-related expenses from PeopleSoft's operating costs will allow the company to devote the necessary resources to development, according to Parker.

Conway said the US Department of Justice's lawsuit to block Oracle's attempted takeover on antitrust grounds has relieved some of the pressure on PeopleSoft.

"We hope the remaining distractions associated with Oracle will be resolved in Q2" 

In addition to its poison pill, PeopleSoft has on its side the DOJ's opposition to the deal and the European Commission's trepidation about it. The EC's investigation of the proposed acquisition is in hiatus while the organisation awaits more information from Oracle, but the commission has already served Oracle with a list of objections.

Stacey Cowley writes for IDG News Service


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