At PeopleSoft's European Connect event earlier this month, just a couple of days after Craig Conway's departure and the announcement that the board had "lost confidence" in their former chief executive, their new chief executive, Dave Duffield, was nowhere to be seen.
Not surprising really. After all, anything he had said would likely have been misconstrued. At the press conference there was disappointment but no surprise among journalists and analysts when PeopleSoft stated it would not be answering any questions regarding Oracle's hostile takeover bid. It was a test for PeopleSoft's regional management team to show a strong, united front. They performed well, given the fact that they were probably as much in the dark as everyone else at the time.
Even with the defeat of the Department of Justice, following a ruling last month that Oracle's bid to buy PeopleSoft is not a violation of antitrust law, there are still major obstacles in the way of Oracle acquiring PeopleSoft.
The European Commission has still not issued its opinion; PeopleSoft's "poison pill" provision would need to be suspended by the board of directors; and a majority of PeopleSoft shareholders would have to be convinced to tender their shares at some agreeable price.
Analyst AMR Research believes that the European Commission is unlikely to block this deal. In most cases, it tries not to issue antitrust rulings that conflict with US decisions because of the confusion that would be created, and it is particularly unlikely to directly contradict a US federal- court decision. There is also far less public concern about this potential acquisition in Europe because both Oracle and PeopleSoft have much smaller shares of the European application market.
PeopleSoft's anti-takeover provision is likely to become the major focus of Oracle's campaign. It will try to convince PeopleSoft's board of directors to suspend the provision and engage in direct negotiations.
What does the antitrust ruling mean for PeopleSoft customers and the company's prospects?
The uncertainty surrounding this transaction has disrupted IT deployment strategies and delayed purchase decisions for months. Although companies that own or are considering PeopleSoft applications would love to have this situation resolved, this ruling does not help. The probability that Oracle will buy PeopleSoft has increased, but it is far from certain, and the process is likely to continue for many more months.
Oracle will now begin an active campaign to reassure PeopleSoft customers. It has already posted a letter and "PeopleSoft Customer Commitment" document on its website, and Oracle's management is expected to take every opportunity to clarify its plans for PeopleSoft products.
Although Oracle continues to insist that it will not actively market PeopleSoft products, it does intend to provide long-term support and enhancements for the PeopleSoft Enterprise product line. However, there is no way of knowing the extent or duration of those enhancements or how they would compare to the enhancements and development from an independent PeopleSoft.
Most PeopleSoft Enterprise customers and prospects should assume that in the event of an acquisition, the products would be well supported with at least a minimal level of enhancements. Those companies that are depending on significant new product features from PeopleSoft should be much more cautious until the ownership situation is clarified.
Oracle also intends to offer application exchange rights and migration tools to allow PeopleSoft users to move to Oracle applications. This offers some level of investment protection, but it is doubted that it will hold much appeal for businesses running PeopleSoft.
The situation for PeopleSoft Enterprise One (formerly JD Edwards) users is far less clear. At the time of the initial bid for PeopleSoft, Oracle executives were vocal about their opposition to PeopleSoft acquiring JD Edwards, and they have suggested that they are far less interested in the JD Edwards customer base.
In its published documents, Oracle claims it does not have enough information about these product lines or PeopleSoft's plans for it to be able to make a firm commitment about support or enhancement.
AMR Research believes the former JD Edwards' customer base is not a good fit for Oracle, and there is a real possibility that Oracle might try to sell that business if it succeeds in acquiring PeopleSoft. These are attractive products with a large and lucrative customer base, so there would be a number of other companies interested in buying the JD Edwards business. The PeopleSoft Enterprise One or PeopleSoft World product lines will not disappear or go unsupported, but most users or prospects may want to wait a bit longer before making major commitments.
Technology executives have expressed mixed feelings about this ruling. Although many are pleased to see the DoJ defeated and the narrow interpretation of the market rejected, they are still not happy with the prospect of Oracle buying PeopleSoft.
"Unfriendly takeovers" are never popular, and many executives dislike Oracle's extreme aggressiveness and insistence that software companies have to be huge to survive. There are also a number of software, infrastructure and services companies that derive a great deal of revenue from the PeopleSoft base, and they are concerned about the direct impact on their business.
If the antitrust ruling stands, and if Oracle finally succeeds in the acquisition, it will accelerate the consolidation that is already under way in the application market. The huge customer bases and enormous development resources of SAP, Oracle, and Microsoft will put tremendous pressure on the rest of the applications industry, and the ruling will remove most concerns about antitrust.
In the near term, SAP should continue to benefit from the turmoil. The uncertainty about the fate of PeopleSoft and the distraction of Oracle executives have contributed to SAP's positive results over the last several quarters, and that is unlikely to change. Even if PeopleSoft remains independent, both it and Oracle will be weakened from the battles. If Oracle prevails, it will face months of corporate indigestion as it tries to absorb a complex, $2bn (£1.11bn) software company. In either scenario, SAP is likely to remain the safest choice for applications.
Throughout this entire process, there has been much speculation about a white knight stepping in to rescue PeopleSoft from the clutches of Oracle. The companies most often mentioned are IBM and Microsoft, but both companies have repeatedly stated that they are not interested, and it is unlikely that either one will get involved at this stage.
Although there is no doubt that IBM and Microsoft would prefer PeopleSoft to remain independent, there are strong reasons to stay out of this fight. The acquisition of PeopleSoft would put Microsoft or IBM in the position of directly competing with SAP, which would be uncomfortable given the amount of revenue that both companies derive from their existing SAP relationship.
This represents a major win for Oracle, and a personal achievement for chief executive Larry Ellison, but it does not ensure that Oracle will end up owning PeopleSoft. PeopleSoft users should not panic because ultimately the products will continue to be supported and enhanced by some supplier for a long time. However, it may be several months before they know which company that will be.
Nigel Montgomery is an analyst at AMR Research