Welcome!

Weblogic Authors: Yeshim Deniz, Elizabeth White, Michael Meiner, Michael Bushong, Avi Rosenthal

Related Topics: Open Source Cloud

Open Source Cloud: Article

Oracle-PeopleSoft, God Bless 'em, Turns into an Old-fashioned Donnybrook

Oracle-PeopleSoft, God Bless 'em, Turns into an Old-fashioned Donnybrook

Oracle raised its bid for PeopleSoft, the company it's pursuing with a hotfooted hostile tender offer, from $16 a share to $19.50 Wednesday morning in an attempt to woo PeopleSoft stockholders to its side.

The move raises the value of Oracle's bid from $5.1 billion, which was widely regarded as parsimonious, to $6.3 billion. The amount, Oracle CFO Jeff Henley pointed out, is a 29% premium over where PeopleSoft stock was before Oracle announced its run on the company on July 6, 48% if the $2 billion that PeopleSoft has in the bank is discounted.

The question still remains whether Oracle thinks PeopleSoft is really worth another billion dollars or it's just trying to mess with PeopleSoft's business. Oracle insists it's serious. If it is, it may have to go a couple of bucks higher.

Oracle also filed suit in Delaware, where corporate goverance is sorted out, challenging the deal between PeopleSoft and JD Edwards that PeopleSoft restructured Monday morning turning half of its all- stock offer for JDE into cash and sprinkling a little powder sugar on the thing by dolloping out another $50,000. The value of the total transaction is now at $1.75 billion.

PeopleSoft and JDE said they were trying to accelerate their transaction and close the deal in Q3, a few weeks earlier perhaps than originally anticipated.

The actual point of the new terms is that new equation means PeopleSoft can bypass Nasdaq regs requiring a shareholders vote, which Oracle was counting on to reach out to them. Oracle claims the JDE merger terms were changed simply to entrench management and asked, "If PeopleSoft's board is so convinced that the JD Edwards acquisition is a great, why won't it let their shareholders vote on it?"

More important, Oracle needs PeopleSoft to drop its poison pill for its offer to be valid. As it is, Oracle hasn't even been able to get in to talk to the PeopleSoft board, although the board, which rejected Oracle's first bid out of hand, grudgingly agreed to consider the offer after Oracle increased it. PeopleSoft told stockholders it would make its recommendation "in due course" and not to do anything beforehand.

Meanwhile, PeopleSoft has gotten the state of Connecticut on its side. Connecticut, which is installing $111 million worth of PeopleSoft software and is worried it'll have to spend millions to replace it, is going to sue Oracle for antitrust to nip its tender in the bud. Shades of the Microsoft antitrust trial, state Attorney General Richard Blumenthal mumbled something about "assembling a powerful coalition of states" and trying to get the Justice Department to come down against Oracle.

Anyway, Oracle has managed to meet with the institutions that own a majority of PeopleSoft stock - folks that also own Oracle, Henley said - and claimed that they "endorsed [Oracle's] strategy and concept" - at the higher price of course. That price is widely suspected of being negotiated and still being insufficient to win the day. The cynical say it's just enough to make Oracle look sincere and ultimately walk away after throwing a monkey wrench into PeopleSoft's business.

See, because of the Oracle raid a lot of PeopleSoft's 5,000 customers are believed to be waiting until the smoke clears to sign contracts and it's increasingly possible PeopleSoft won't make its quarter, making it look all the more like takeover material.

Reports say things are so bad PeopleSoft is guaranteeing customers their money back if Oracle succeeds to get them to sign contracts. Henley said he had heard "rumors" of such a thing and described it as "egregious" if true. Oracle is suing to get PeopleSoft to stop such deals.

PeopleSoft itself said its own JDE sweetener was partially intended to "minimize customer uncertainty" that Oracle will be run off and that the PeopleSoft-JDE nuptials will go though.

Before Oracle upped its bid, the Wall Street Journal figured Ellison was "simply trying to damage PeopleSoft by scaring off potential customers, in the process sabotaging a merger PeopleSoft had in the works that would make [it] more threatening than Oracle."

The paper reckoned the dead giveaway was Ellison's avowed intent to "cancel PeopleSoft's product line and thus force everyone to move to Oracle. That's the tip-off that he can't possibly be serious," it said.

"Getting this sort of corporate software up and running usually requires spending millions of dollars on engineers who customize the software for the peculiarities of each business. Often, these 'implementation' efforts fail completely. Indeed, Oracle's own corporate software has a long, rich tradition for being buggy and hard to work with.

"Mr Ellison now is telling PeopleSoft customers that they will soon have no choice but to start a lengthy, painful and risky process all over again. Who in their right mind would buy PeopleSoft with that cloud in their future?"

For the record, a PeopleSoft takeover is supposed to make Oracle more competitive with Microsoft and SAP even though Oracle also argues that PeopleSoft's position in the market is rapidly declining and that the software business, where consolidation is long overdue, needs to adopt economies of scale.

What Oracle would be doing is simply buying PeopleSoft customers on the theory that it could eventually get them to trade off to Oracle's e-business suite.

Oracle claims its acquisition of PeopleSoft would turn accretive in a year - naturally it would gut the place, keeping only support and developers - and that PeopleSoft accounts would be supported until next-generation Oracle software, integrated with PeopleSoft features, arrives. Henley says Oracle would get PeopleSoft's maintenance and support revenues at the sacrifice of licenses and training revenues. He called the plan "conservative and logical."

Oracle's tender is currently due to close on Monday, July 7, though of course it can be extended. If Oracle fails to prevail in court, and there's absolutely no assurance that it will, and it sticks to its guns, it could take a year to bring its offer to a stockholders vote. In the meantime, Oracle is passing out a PeopleSoft phone number urging stockholders to call and complain. A bunch of stockholder suits against PeopleSoft has already been filed.

The PeopleSoft tender started Thursday morning and is supposed to run until July 17. Oracle's started June 9.

Meanwhile, PeopleSoft, which like JDE is suing Oracle to get it off its back, has placed ads in vehicles like the New York Times and the Financial Times asking customers to "Show your support for PeopleSoft by moving ahead with your planned purchases of PeopleSoft products this month." Everybody's fighting now for the hearts and minds of the shareholders.

Naturally shareholders very often prefer cash to stock. According to the amended agreement, PeopleSoft would have to dig into its jeans and count out $863 million in cash money. Shareholders can have cash and/or stock. PeopleSoft is now supposed to issue 52.6 million new shares for JDE's 122.4 million, giving JDE 14.3% of the company.

The pair has also had a rethink about their "synergy estimate" and say that they now figure they can save $150 million-$200 million if they were combined. Previously the number was $80 million, which Oracle CEO Larry Ellison criticized as picayune.

Oracle's actions have succeeded in raising doubts about the wisdom of the JDE acquisition and the depth of the synergy between PeopleSoft and JDE. JDE, Henley noted, only had an operating margin of 11% at the height of the boom. More usually it's in the single digits.

Linuxgram is published weekly by G2 Computer Intelligence Inc.

www.g2news.com 323 Glen Cove Ave.; Sea Cliff, NY 11579, USA;
Tel: 516 759-7025 - Fax: 516 759-7028

Send press releases to: [email protected]
Subscription price per year: $195/£140 individual reader.
Corporate Subscription available at quantity discounts. E-mail: [email protected]

(c) Copyright 2003 G2 Computer Intelligence, Inc.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


@ThingsExpo Stories
BnkToTheFuture.com is the largest online investment platform for investing in FinTech, Bitcoin and Blockchain companies. We believe the future of finance looks very different from the past and we aim to invest and provide trading opportunities for qualifying investors that want to build a portfolio in the sector in compliance with international financial regulations.
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, whic...
Imagine if you will, a retail floor so densely packed with sensors that they can pick up the movements of insects scurrying across a store aisle. Or a component of a piece of factory equipment so well-instrumented that its digital twin provides resolution down to the micrometer.
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settle...
Product connectivity goes hand and hand these days with increased use of personal data. New IoT devices are becoming more personalized than ever before. In his session at 22nd Cloud Expo | DXWorld Expo, Nicolas Fierro, CEO of MIMIR Blockchain Solutions, will discuss how in order to protect your data and privacy, IoT applications need to embrace Blockchain technology for a new level of product security never before seen - or needed.
Leading companies, from the Global Fortune 500 to the smallest companies, are adopting hybrid cloud as the path to business advantage. Hybrid cloud depends on cloud services and on-premises infrastructure working in unison. Successful implementations require new levels of data mobility, enabled by an automated and seamless flow across on-premises and cloud resources. In his general session at 21st Cloud Expo, Greg Tevis, an IBM Storage Software Technical Strategist and Customer Solution Architec...
Nordstrom is transforming the way that they do business and the cloud is the key to enabling speed and hyper personalized customer experiences. In his session at 21st Cloud Expo, Ken Schow, VP of Engineering at Nordstrom, discussed some of the key learnings and common pitfalls of large enterprises moving to the cloud. This includes strategies around choosing a cloud provider(s), architecture, and lessons learned. In addition, he covered some of the best practices for structured team migration an...
No hype cycles or predictions of a gazillion things here. IoT is here. You get it. You know your business and have great ideas for a business transformation strategy. What comes next? Time to make it happen. In his session at @ThingsExpo, Jay Mason, an Associate Partner of Analytics, IoT & Cybersecurity at M&S Consulting, presented a step-by-step plan to develop your technology implementation strategy. He also discussed the evaluation of communication standards and IoT messaging protocols, data...
Coca-Cola’s Google powered digital signage system lays the groundwork for a more valuable connection between Coke and its customers. Digital signs pair software with high-resolution displays so that a message can be changed instantly based on what the operator wants to communicate or sell. In their Day 3 Keynote at 21st Cloud Expo, Greg Chambers, Global Group Director, Digital Innovation, Coca-Cola, and Vidya Nagarajan, a Senior Product Manager at Google, discussed how from store operations and ...
In his session at 21st Cloud Expo, Raju Shreewastava, founder of Big Data Trunk, provided a fun and simple way to introduce Machine Leaning to anyone and everyone. He solved a machine learning problem and demonstrated an easy way to be able to do machine learning without even coding. Raju Shreewastava is the founder of Big Data Trunk (www.BigDataTrunk.com), a Big Data Training and consulting firm with offices in the United States. He previously led the data warehouse/business intelligence and B...
"IBM is really all in on blockchain. We take a look at sort of the history of blockchain ledger technologies. It started out with bitcoin, Ethereum, and IBM evaluated these particular blockchain technologies and found they were anonymous and permissionless and that many companies were looking for permissioned blockchain," stated René Bostic, Technical VP of the IBM Cloud Unit in North America, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Conventi...
When shopping for a new data processing platform for IoT solutions, many development teams want to be able to test-drive options before making a choice. Yet when evaluating an IoT solution, it’s simply not feasible to do so at scale with physical devices. Building a sensor simulator is the next best choice; however, generating a realistic simulation at very high TPS with ease of configurability is a formidable challenge. When dealing with multiple application or transport protocols, you would be...
Smart cities have the potential to change our lives at so many levels for citizens: less pollution, reduced parking obstacles, better health, education and more energy savings. Real-time data streaming and the Internet of Things (IoT) possess the power to turn this vision into a reality. However, most organizations today are building their data infrastructure to focus solely on addressing immediate business needs vs. a platform capable of quickly adapting emerging technologies to address future ...
We are given a desktop platform with Java 8 or Java 9 installed and seek to find a way to deploy high-performance Java applications that use Java 3D and/or Jogl without having to run an installer. We are subject to the constraint that the applications be signed and deployed so that they can be run in a trusted environment (i.e., outside of the sandbox). Further, we seek to do this in a way that does not depend on bundling a JRE with our applications, as this makes downloads and installations rat...
Widespread fragmentation is stalling the growth of the IIoT and making it difficult for partners to work together. The number of software platforms, apps, hardware and connectivity standards is creating paralysis among businesses that are afraid of being locked into a solution. EdgeX Foundry is unifying the community around a common IoT edge framework and an ecosystem of interoperable components.
DX World EXPO, LLC, a Lighthouse Point, Florida-based startup trade show producer and the creator of "DXWorldEXPO® - Digital Transformation Conference & Expo" has announced its executive management team. The team is headed by Levent Selamoglu, who has been named CEO. "Now is the time for a truly global DX event, to bring together the leading minds from the technology world in a conversation about Digital Transformation," he said in making the announcement.
In this strange new world where more and more power is drawn from business technology, companies are effectively straddling two paths on the road to innovation and transformation into digital enterprises. The first path is the heritage trail – with “legacy” technology forming the background. Here, extant technologies are transformed by core IT teams to provide more API-driven approaches. Legacy systems can restrict companies that are transitioning into digital enterprises. To truly become a lead...
Digital Transformation (DX) is not a "one-size-fits all" strategy. Each organization needs to develop its own unique, long-term DX plan. It must do so by realizing that we now live in a data-driven age, and that technologies such as Cloud Computing, Big Data, the IoT, Cognitive Computing, and Blockchain are only tools. In her general session at 21st Cloud Expo, Rebecca Wanta explained how the strategy must focus on DX and include a commitment from top management to create great IT jobs, monitor ...
"Cloud Academy is an enterprise training platform for the cloud, specifically public clouds. We offer guided learning experiences on AWS, Azure, Google Cloud and all the surrounding methodologies and technologies that you need to know and your teams need to know in order to leverage the full benefits of the cloud," explained Alex Brower, VP of Marketing at Cloud Academy, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clar...
The IoT Will Grow: In what might be the most obvious prediction of the decade, the IoT will continue to expand next year, with more and more devices coming online every single day. What isn’t so obvious about this prediction: where that growth will occur. The retail, healthcare, and industrial/supply chain industries will likely see the greatest growth. Forrester Research has predicted the IoT will become “the backbone” of customer value as it continues to grow. It is no surprise that retail is ...