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 Friday in connection with a court case the Pleasanton, California-based firm filed against Oracle, claiming that the company is employing unfair practices in its takeover bid, including efforts to disrupt PeopleSoft's relationship with customers.
While Oracle's Vice President of Analyst Relations Peggy O'Neill dismissed the suit in an e-mail dated June 13 as "frivolous," and said that PeopleSoft is in "disarray," other e-mail messages reveal the threat PeopleSoft represented to the world's number-two software maker amid increasing market consolidation.
PeopleSoft won more deals against Oracle in two quarters of Oracle's fiscal year 2003, according to an e-mail sent by Oracle Executive Vice President of Applications Development Ron Wohl to company leaders.
PeopleSoft won 55 percent of the deals up for grabs against Oracle in the fiscal third quarter and 51 percent of the deals during the fiscal second-quarter, the e-mail states. While Oracle pulled up its percentage of winning bids in its fiscal fourth quarter, scoring 51 percent against PeopleSoft, there was "no steady trend" of improvement, Wohl wrote.
However, Oracle executives comment in the messages how 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 concedes in at least one e-mail that shifting platforms is not 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.
But despite the platform shifts customers may face, the e-mails show that Oracle worked hard to get out its message that the takeover would payoff in the end. Several e-mail messages detail its efforts to influence analysts, and in one case O'Neill reviews and comments on a draft report from Giga Information Group analysts, saying she is 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.
O'Neill goes 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 boasts 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 in Europe could not immediately comment on the released e-mail messages Monday morning. Representatives for Forrester Research Inc., which owns Giga, were also not available.