DENVER — The head of J.D. Edwards admits the uncertainty over his company’s future will affect sales of its enterprise resource planning products and services.
“”I think there will be opportunities where customers will slow down””
making buying decisions, Bob Dutkowsky, JDE chairman and CEO, told reporters here on the eve of JDE’s annual user group conference.
“”But there will also be opportunities where customers will forge ahead.”” There’s a cost to a company of waiting until things clear before deciding on a major software purchase, he said.
Although he emphasized that JDE has a “”definitive merger”” proposal signed with PeopleSoft Inc., Oracle Corp. has thrown doubt with its hostile all-cash offer to buy PeopleSoft. Oracle chair Larry Ellison offered no support for PeopleSoft’s JDE deal, saying it will be reviewed if his offer is accepted by PeopleSoft shareholders.
Dutkowsky slammed the Oracle proposal as one which could trigger U.S. and European antitrust laws and hurts customer product choice.
Oracle hopes to conclude its deal before the PeopleSoft-JDE merger, which the companies have set for late this year. Oracle’s hostile bid will expire on July 7, but the company plans to extend the deadline.
In the meantime, analysts agree, sales of both JDE and PeopleSoft could suffer, which they say could be Ellison’s strategy. If PeopleSoft has a bad financial quarter that may tip the scales, said David Alschuler vice-president of strategy and e-business at Aberdeen Group.
“”New customers are unlikely to write PeopleSoft deals while this transaction is unresolved, because Larry’s said he’s going to kill PeopleSoft products in favour of Oracle’s”” he added.
Similarly for JDE, “”we’ll see some downturn (in sales) in the short run, and that reflects the uncertainty,”” Alshuler said after Dutkowsky’s press conference. “”But they do have a go-forward strategy — to keep going.””
JDE is determined to move the convention’s spotlight away from the uncertainty of the financial dealing: at the end of the press conference a spokesman said that company officials here will only talk about the two dozen new products and services that are about to be announced.
In fact, one of the themes of Dutkowsky’s remarks is that the company is ready in the event that Oracle buys PeopleSoft and leaves JDE hanging. “”Larry has already described how he’ll treat his customers,”” he said, referring to Ellison’s statement that he’ll try to move PeopleSoft customers to Oracle applications rather than improve PeopleSoft products.
Such a strategy of forcing companies to change applications “”creates opportunities”” for JDE “”and we are prepared to take advantage of that,”” said Dutkowsky.
By comparison, a merged PeopleSoft-JDE promises to enhance both products lines, he said. He appealed to corporate customers by arguing that the deal offers choice, compared to Oracle, which will take out competition.
In an attempt to appeal to PeopleSoft shareholders, he stressed the JDE deal came after “”eight months of careful, reasoned study,”” compared to Ellison’s offer, which came four days later.
He said he and PeopleSoft CEO Craig Conway hope to convince PeopleSoft shareholders that their two companies offer “”more value than a hostile take-over based solely on financial re-engineering.””
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