My planned topic for today would have been somewhat less interesting
than the news this morning that PeopleSoft has agreed to be acquired
by Oracle for $26.50 per share.
This seemed nearly inevitable after 60% of the shares were recently
tendered, but the board appeared to be taking the fight
at least until the annual meeting next spring.
Last week, Oracle promised to "oversupport" PeopleSoft customers
and to complete and release PeopleSoft 9.
It had previously promised to support PeopleSoft products for another
eight years. Oracle will want to avoid paying $2 billion in rebates
to existing customers, so it can't drop support too early. However,
it won't actively market PeopleSoft to new customers.
The PeopleSoft system is well worth supporting. After all, 12,000
existing customers presumably could have bought Oracle but chose PeopleSoft
or JDE instead.
Many of these don't run Oracle databases now and will need to be sold
on a conversion. Much of the talk about this acquisition revolved
around the maintenance payment stream and how this would benefit Oracle's
bottom line. Oracle certainly doesn't want to alienate these customers.
Oracle also said last week that it would develop a successor to both
PeopleSoft and the existing Oracle offerings that would combine the
best features of both, the better to compete against SAP. In that,
I wish them well.