Oracle e-mails disclose some spin efforts and a few losses to PeopleSoft

IDG News Service - As Oracle Corp. continues its takeover attempt for PeopleSoft Inc., internal e-mail messages reveal the competition between the two companies to win customers and Oracle's efforts to woo industry watchers into supporting its unsolicited bid.
The e-mail messages were distributed by PeopleSoft representatives late Sept. 19 in connection with a court case the Pleasanton, Calif.-based firm filed against Oracle, claiming that the company is employing unfair practices in its takeover bid, including efforts to disrupt PeopleSoft's relationships with customers.
While Oracle's vice president of analyst relations, Peggy O'Neill, dismissed the suit as "frivolous" in an e-mail dated June 13 and said PeopleSoft is in "disarray," other e-mail messages reveal the threat PeopleSoft represents to the world's No. 2 software maker amid increasing market consolidation.
PeopleSoft won more deals than Oracle in two quarters of Oracle's fiscal 2003, according to an e-mail sent by Ron Wohl, Oracle's executive vice president of applications development, to company leaders.
PeopleSoft won 55% of the deals up for grabs against Oracle in the fiscal third quarter and 51% of the deals during the fiscal second-quarter, the e-mail stated. While Oracle pulled up its percentage of winning bids in its fiscal fourth quarter, scoring 51% against PeopleSoft, there was "no steady trend" of improvement, Wohl wrote.
However, Oracle executives noted in the messages that PeopleSoft has been weakened by its takeover bid. "We've certainly wounded PSFT [PeopleSoft]," O'Neill wrote in an e-mail dated June 7. "Even if we don't close this deal, this is going to take PSFT time to recover."
The correspondence also underscores the dilemma facing customers. Not only are PeopleSoft and Oracle customers affected by the takeover bid, but so are customers of J.D. Edwards & Co., which PeopleSoft recently acquired. All three groups of customers face questions as to whether or not their software will be supported amid a market shakeup.
Oracle Executive Vice President Chuck Phillips acknowledged in at least one e-mail that shifting platforms isn't easy. "Migrating between releases is never cost free and consulting is involved. We never said otherwise and that's a fact of life as anyone remotely familiar with software knows," Phillips wrote in an e-mail dated June 24.
Oracle has said that it has no plans to continue selling and promoting the PeopleSoft product lines if the acquisition goes through but that it will continue to support the PeopleSoft products for 10 years and help customers migrate to Oracle.
Despite the platform shifts customers may face, the e-mails show that Oracle worked hard to get out its message that the takeover would pay off in the end. Several e-mail messages detailed its efforts to influence analysts, and in one case, O'Neill reviewed and commented on a draft report from Giga Information Group Inc. analysts, saying she was concerned about their "tone and balance."
"The drafts we've seen so far seem to be more occupied with beating Oracle up for its behavior rather than give advice to end users. I urge you to take a second look at this," O'Neill wrote. She went on to write that PeopleSoft, Oracle and J.D. Edwards' customers are probably "anxious" and that they are looking at Giga to help "educate them and calm them down."
In fact, analyst and media relations are a focus of many of the released e-mail messages. In one, O'Neill boasted to Phillips about her ability to win over an analyst at AMR Research Inc. "See how influencable [sic] they are when we give them a little love!" O'Neill wrote in an e-mail dated June 7. "We deliberately courted Bruce because he has a 'strong voice' within AMR, he is able to drown out/mute other negative opinions from his colleagues."
Oracle representatives couldn't immediately comment on the released e-mail messages this morning. Representatives for Forrester Research Inc., which owns Giga, also weren't available.

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