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Oracle appeals to former J.D. Edwards shops

Oracle's co-president took his acquisition argument directly to the newest PeopleSoft users, but many who listened to the appeal said they would have preferred to hear from someone else.

SAN DIEGO -- Oracle Corp. co-president Chuck Phillips stepped into the lion's den this morning, telling attendees at a user conference for companies running the software from the former J.D. Edwards & Co. that his company's proposed acquisition of PeopleSoft Inc. would benefit them.

But when he was done, many attendees had one question on their minds: Where was PeopleSoft?

Pleasanton, Calif.-based PeopleSoft, which acquired J.D. Edwards last summer, has resisted Oracle's acquisition attempt. PeopleSoft also declined to address Quest attendees.

As a J.D. Edwards user, you feel like you're in limbo.
Jim Hill, IT project leader, Endevco ,

Some J.D. Edwards users, who survived one takeover and now face the possibility of another, said the slight was noticeable. They argued that, while they heard little new from Phillips, they heard nothing from PeopleSoft.

"I don't think he said anything [of value]," said Jeff Griffin, regional IT director for Newland Communities in La Jolla, Calif., about Phillips' address.

Griffin said he wants PeopleSoft to say "they'll recognize the customer base and provide the customer support we grew to expect from J.D. Edwards."

It's been a whirlwind of acquisition activity for users of J.D. Edwards software. They learned in June that PeopleSoft was acquiring their software vendor -- and then heard a few days later that Oracle was launching its takeover bid.

Last week, however, the Department of Justice challenged Oracle's acquisition attempt on antitrust grounds. That brought users some sense of relief. So did Phillips' appearance, if not necessarily his message.

"At least he showed up," said Jim Hill, IT project leader for Endevco Corp. in San Juan Capistrano, Calif. "It brings a little comfort. I'm a little more concerned that PeopleSoft didn't have some presence. It kind of comes off like they don't give a crap about us."

A PeopleSoft spokesman said that the company supports 170 user groups but that Quest is not among them.

During a brief presentation, Phillips outlined Oracle's general plans for PeopleSoft applications and its argument for combining the companies.

Ironically, however, in its filing in U.S. District Court last week, the Department of Justice used Phillips' own words against him. The filing quotes Phillips as saying, back when he was a financial analyst, that there are only "three viable suppliers" in the enterprise software market.

Yet, today, Phillips said the market was larger. He described SSA and GEAC as software competitors, and he mentioned outsourcing as another option. The Department of Justice has identified Oracle, PeopleSoft and Germany's SAP AG as the only viable vendors in the market.

"It is the government's burden to define a set of customers who are dependent on only SAP, Oracle or PeopleSoft," Phillips said. "We don't think that's possible. The market for enterprise applications is highly competitive. It's a buyers' market."

Phillips said that PeopleSoft customers would benefit from access to Oracle's 24/7 customer support and that savings realized from the merger would go toward future enhancements and more vertical functionality. He also stressed the benefits of Oracle's global outsourcing abilities.

Tony Aldemair, director of IT for Edwards Life Sciences in Irvine, Calif., disputed Phillips' notion that the Oracle acquisition wouldn't hamper competition.

"Oracle is seen as a cocky corporation with a lower level of customer understanding," he said.

Phillips cautioned that Oracle does not have access to PeopleSoft's product road map, and he said that many things could happen with the J.D. Edwards products before the takeover issue has worked its way through the courts. PeopleSoft currently runs three product lines, two of which are application sets from the former J.D. Edwards -- one for the midmarket and another for shops running IBM's iSeries platform.

Barbara Schmit, president of the Quest board of directors and CIO of Computer Network Technologies in Minneapolis, preceded Phillips to the stage. After striding to the podium in a red blazer and black pants and blouse, Schmit said she had not intentionally dressed in Oracle's corporate colors.

She then outlined PeopleSoft's lack of support for the independent users group. While J.D. Edwards had worked with Quest as an independent entity, Schmit said, PeopleSoft has refused to participate in Quest events, including its global users conference.

Officially, however, Quest has come out against the acquisition.

"I understand [PeopleSoft's] thinking, of not wanting Oracle to know their strategies, but we're their customers and a revenue stream," said Perry Mullinix, ERP/JDE program manager for Gilead Sciences Inc., in Foster City, Calif.

Mullinix said his company has been waiting on making purchasing decisions until it learns more about the possible takeover.

"We're holding off as long as possible," Mullinix said. "That's not to say we'll hold off forever. We're not going to be able to sit and wait. It's forced us into a position where, rather than think about our product and our customers, we have to think about our ERP system."

Griffin also said his company has been waiting on IT investments, but it may have to go forward in the next couple of weeks, regardless of Oracle's ongoing legal battle.

Others said this uncertainty is becoming par for the course.

"We haven't even gotten comfortable with the first [acquisition] yet," Hill said. "As a J.D. Edwards user, you feel like you're in limbo."

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