DENVER – As 7,000 users, partners and customers arrived here over the weekend for the annual J.D. Edwards Quest Global users conference, many have been thinking, “”What will happen this morning?””
A week ago Monday they awoke to hear
JDE had agreed to be bought> by PeopleSoft Inc. in a US$1.5 billion stock swap set to be consummated late in the year. By Friday morning, Oracle Corp. was offering to buy PeopleSoft in a hostile all-cash US$5.1 billion proposal.
Oracle CEO Larry Ellison said that if he succeeds the JDE deal would be reviewed.
The conference officially starts Tuesday, but comments from Canadians gathered at a downtown restaurant Saturday night show how the atmosphere has changed.
“”Even if the Oracle deal doesn’t go through Ellison’s created doubt in the mind of any buyer of PeopleSoft or J.D.Edwards for the month of June,”” said Peter Weiler of Whitby, Ont.-based SCM Consulting, a former JDE staffer who specializes in JDE implementations. “”If I was a prospect down here, I wouldn’t know what to think.””
Mark Winkler, vice-president of finance for Unalloy-IWRC, a Brampton, Ont. Steel products distribution company which is pondering upgrading from JDE World to OneWorld on its AS/400 system, agreed. “Before we sign off we certainly will have to see where Edwards fits in with Oracle and PeopleSoft,” he said.
Asked Sunday if the Oracle bid is unsettling for business — and the 350 prospects JDE is bringing here this week to help wrap up sales — Victor Chayet, the company’s director of communications replied: “”Absolutely.””
To counter that, Chayet and his staff have worked virtually non-stop since Friday to get the message out to the press, financial and industry analysts and to customers that JDE isn’t close to death. That includes quickly printing up 15,000 palm-sized cards for distribution touting the PeopleSoft-JDE merger as one that will create solutions for users.
Prospects will be reminded that thousands decided to come for this conference before the PeopleSoft proposal because of the strength of JDE products, Chayet said. Should that deal fall through, he argued, that value remains.
The message, Chayet said, is also that the Oracle deal is aimed at breaking up a merged enterprise resource planning software entity that would be second in the industry. Oracle’s proposal, he said, would remove product choice for customers.
However, he admitted those arguments won’t sway PeopleSoft shareholders. He also acknowledged JDE’s future could be shaky: Oracle would likely extinguish the company if it fell into its hands, he said.
Industry analysts, who before Friday had almost nothing but praise for the proposed PeopleSoft-JDE deal, had nothing but scorn for Ellison’s offer.
PeopleSoft customers will lose, argued Forrester Research analyst Laurie Orlov in a research note, because they will be forced to migrate over time to Oracle products or jump ship. Maintenance pricing will increase, she added. Meanwhile JDE customers “”move into a mystery zone”” waiting to see if Oracle buys it.
“I think some customers will pause a bit to see if the dust settles within a week,” agreed Daniel Duffy, president of Midrange Computer Group, who was interviewed from his Markam, Ont. Office after the Oracle announcement.
“But,” he added, “if they like the functionality of JDE or PeopleSoft I think they’ll go down that road. Because there’s got to be a transition, and whoever ends up owning who is not going to tick off the installed base.”
A JDE and PeopleSoft reseller, Duffy is rooting for their merger. “Done properly, it could be a match made in heaven.”
Another supporter of that deal is Jean-Marc Leboeuf, president of Createch Group of Montreal, a JDE reseller and distributor. “I have a hard time seeing the rationale behind Oracle’s move,” he said on Friday from his office.
Should the Oracle deal go through “it will create a bit of turmoil. It won’t serve the organizations because they’ll be inward focused for a while rather than to their customers. I believe Oracle’s move is a stunt, and it won’t materialize.”
“This smacks of pure marketeering to try and create a lot of noise and doubt in the marketplace,” Michael Etinson, president of Syntax.net, a JDE reseller interviewed from his Montreal office.
Meanwhile, Alison Wheeler, JDE’s Canadian manager, might be thinking of what she said to a reporter when she was boosting the PeopleSoft offer, a mere day before Oracle bid.
“I think it’s the beginning of consolidation in the industry, and fortunately we were the first and got to choose who we wanted to be involved with, versus a hostile environment.”
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