Larry looms large as customer concern peaks

Customer concern peaked in Australia this week after a PeopleSoft director said the board is willing to negotiate a deal with Oracle after being locked in a takeover battle for nearly 17 months.

PeopleSoft customer and Yalumba Wine IS software manager Graham Baker said there will undoubtedly be a high level of concern but "we will have to sit back and watch the dust settle".

"We will have to assess what it all means. We're only one company [among many affected]. I'm sure some people will be very concerned," Baker said.

In the wake of the news, the Commonwealth Bank, which runs on a PeopleSoft payroll system, said it will be making arrangements to "take the matter up" with the company directly.

PeopleSoft has been keeping customers abreast of developments sending out e-mails outlining the new management structure, according to Coopers Brewery business systems manager Michael Shearer.

"We have to digest [the news]," he said adding that the brewery thought the takeover was unlikely because of the resistance shown by the government and regulators.

The director of the Victorian user group, Quest, and Smorgan Steel group general manager of business services, Doug George, said it was still too early to comment as no deal had been formalised, but said recent developments prove "everyone is prepared to talk about anything at the right price".

"We have to be cautious and responsible, these things can take a long time. Look at how long it took us to understand what PeopleSoft's intentions were for JD Edwards, particularly EnterpriseOne," George said.

One user that didn't mince words was Durr Industries business systems supervisor Robert Robinson who said PeopleSoft investors want the "biggest bang for their bucks, regardless of the effect that the acquisition might have on the products themselves".

"Sitting on the outside the first question is, was Conway thrown under a bus to prevent further erosion of the Oracle bid price?" Robinson said.

Yankee Group analyst Sheryl Kingstone said appointing Dave Duffield as CEO paves the way for Oracle to acquire PeopleSoft.

"My gut reaction is [the board] is trying to bring in someone who is unbiased. They need a fresh look at managing the potential acquisition," she said.

Australian user groups are divided by recent developments, with the local PeopleSoft user group eagerly awaiting further direction from the US.

However, NSW branch president for the Australian Oracle User Group, Clay Barker welcomed a merger and was optimistic it would result in a far superior product range for both PeopleSoft and Oracle users.

"Apparently the policy will be to take the best out of PeopleSoft and Oracle and create a superior product for the benefit of both parties," Barker said.

"The HR and payroll applications from PeopleSoft are very good so CRM, HR and payroll applications could be taken from PeopleSoft."

Shane Bubb, president, Australian JDE Southern User group (PeopleSoft) said he has had no direct feedback from PeopleSoft over its reaction to both the ousting of Craig Conway and potential merger or takeover by Oracle.

"We were alerted to a change of board on a customer level, but at the moment the whole Oracle/PeopleSoft deal is up in the air," Bubb said.

Copyright © 2004 IDG Communications, Inc.

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