Oracle president upbeat about Peoplesoft takover

Oracle expects to work out its merger plans with PeopleSoft by the end of the year and will "hit the ground running in January,"...

Oracle  expects to work out its merger plans with PeopleSoft by the end of the year and will "hit the ground running in January," according to Oracle president Charles Phillips.

"We've been thinking about this for the past 18 months and have a pretty solid plan," Phillips said.

Oracle announced on Monday that it has signed a definitive agreement to acquire PeopleSoft in a deal which is expected to close in early January.

Oracle has already decided that it will complete and supply PeopleSoft 9, the next version of the PeopleSoft's enterprise software suite and will produce the next version of JD Edwards 6, Phillips said.

"We are going to evaluate the reseller network, and we want resellers to continue to sell the upgrades. We'll tell resellers that we would also like them to take a look at Oracle E-Business Suite Special Edition," Phillips said.

"Resellers can carry multiple editions, and as for our partners, there will be lots of products for them to sell."

Oracle plans to support the product lines it is acquiring for the next 10 years while making it easier for users to migrate to Oracle products over time, he said.

Phillips acknowledged that some of the 12,000 employees at PeopleSoft are likely to be laid off, but he said numbers have not been decided.

"We are interested in keeping those in the developer and support organisations, but a lot less of the administrative positions," he said.

Oracle will also try to quickly evaluate the partnerships and agreements that PeopleSoft brings to the merger.

For example, last September, PeopleSoft announced it was deepening its ties with IBM to optimise its applications for use with WebSphere middleware and development tools and would sell WebSphere products directly through its own sales force.

"I don't have a lot of detail on the IBM contract and I don't know if it was even signed. It is also unclear what they've committed to WebSphere," Phillips said.

But while Oracle would not be interested in adding IBM technology to its stack, Phillips said, it would be very interested in working with IBM on services.

Oracle also is keen on developing other PeopleSoft relationships, including its partnerships with  independent software suppliers.

According to Phillips, Oracle has made considerable strides in evaluating the markets to which PeopleSoft caters and will not shy away from cherry-picking what it sees as the cream of the crop.

"PeopleSoft has a very good presence in federal, state and local government projects. And they have some things we don't have," Phillips said.

Analysts and users have warned that Oracle will need not only to quickly come up with plans for integrating PeopleSoft, but also to clearly articulate those plans if they are to keep customers on their side.

According to Bruce Richardson, an analyst at consultancy AMR Research, the first 30 days are critical and the company will have to make it crystal clear where it plans to go with the PeopleSoft and JD Edwards products.

"It will take a while to digest this acquisition. It's like a python swallowing a school bus," Richardson said.

Richardson also pointed out that Oracle's competitors, in particular Microsoft and SAP, will want to take full advantage of any confusion on the part of current and potential Oracle and PeopleSoft customers. 

"SAP has the opportunity to reap the high end and Microsoft can go after the small and medium-sized businesses while Oracle is distracted," Richardson said.

But Phillips said that not only is Oracle confident it can smoothly handle its merger with PeopleSoft, the company is still interested in continuing its buying spree. "We have said that we are looking at multiple acquisitions," he said.

When asked if Oracle might now have its eye on buying up Siebel, Phillips did not deny that Oracle has designs on the CRM software maker, but he said that any acquisitions Oracle would make in the short term would have to be on a smaller scale.

Laura Rohde writes for IDG News Service

Read more on Operating systems software