Oracle chats up PeopleSoft customers

The noisy exchange of barbs and accusations between PeopleSoft Inc. and its would-be buyer, Oracle Corp., quieted down in recent weeks as the two companies await decisions about the deal from courts and regulatory bodies. But Larry Ellison rarely lets his company stay out of the headlines for long. Oracle returned the spat to center stage Wednesday with a "town hall" meeting for PeopleSoft customers that kicks off several weeks of high-profile events for the two sparring vendors.

The webcast meeting was the second of its kind, at which Oracle executives fielded questions through a moderator about Oracle's plans in the event that its US$7.3 billion bid to acquire PeopleSoft succeed. This time, Oracle enlisted a customer who experienced the company's 1994 acquisition of Digital Electronics Corp.'s RDB database software to attest to Oracle's benign approach to ruling conquered territory.

DirecTV Inc. still uses RDB as the underpinning for its core billing and customer care systems, which track 11 million customers and process up to 25 million transactions each day, said Chief Information Officer Bob Pacek. While DirecTV uses Oracle products elsewhere in the company, Oracle has never pressured the company to scrap RDB and migrate entirely to Oracle's database software. Meanwhile, Oracle's support for RDB has been unwavering, according to Pacek.

Oracle executives Chuck Phillips and Mike Rocha spent most of the meeting reiterating Oracle's pledge to maintain PeopleSoft's applications and support PeopleSoft's customers. While Oracle will offer free module-for-module license swaps to PeopleSoft customers interested in migrating to Oracle's applications, it won't force any customers to do so, Rocha said, noting that 2,000 of the 10,000 customers RDB had when it was acquired are still using RDB's database.

"We plan to treat PeopleSoft products just like Oracle products," Rocha said. "I mean, they will be Oracle products."

Oracle faces daunting obstacles as it seeks to complete the hostile takeover it launched in June. As of early August, only 10 percent of PeopleSoft's shareholders had taken advantage of Oracle's US$19.50-per-share tender offer. Should Oracle manage to win the support of PeopleSoft's shareholders, it could still be derailed by PeopleSoft's "poison pill," a provision in its bylaws that allows it to dilute its stock and make a takeover prohibitively expensive.

Oracle has filed a legal challenge against PeopleSoft's poison pill in Delaware's Chancery Court. The company will also be in court with PeopleSoft on the other side of the country, as it defends against a PeopleSoft lawsuit in California's Alameda County Superior Court charging Oracle with libel and unfair competition. Hearings on that lawsuit are expected to begin shortly.

PeopleSoft Chief Executive Officer Craig Conway will have his own turn at the microphone Thursday, when he speaks in New York at a PeopleSoft meeting with financial analysts. In two weeks, PeopleSoft hosts its annual PeopleSoft Connect customer conference in Anaheim, California. The Oracle Applications Users Group will be running its annual show simultaneously, in San Diego. Oracle's bid for PeopleSoft will be a major source of attendee buzz at all three events.

It is also likely to be a theme at OracleWorld, which begins next week in San Francisco. Although the company's tender offer for PeopleSoft is now set to expire Sept. 19, another extension of the oft-pushed deadline seems inevitable.

As Oracle spokesman Jim Finn said at the conclusion of Wednesday's town hall, "This is going to be a long race ahead of us."

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