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Federal Judge Rules Oracle can Bid for PeopleSoft
terrymaster69 writes "The NY Times reports (free reg, required) that Oracle may have the go ahead to continue its hostile bidding for PeopleSoft. The Justice Department had previously tried to paint the merger as anti-competitive in the corporate services software market. 'Judge Vaughn R. Walker of the Federal District Court in San Francisco rejected the government's definition of the market as too narrow, noting that the software business is particularly dynamic, with a host of current and emerging competitors in that area including Microsoft.'"
Well, I think they do have a point there... there is plenty of competition around in the database market, and Oracle would still have to compete in a 'real' way - as far as I can see they can't be able to abuse their market position, simply because there's enough competition.
On the other hand, a big corporation getting even bigger isn't really a good thing...
- Leon Mergen
http://www.solatis.com
There's a HRMS from PeopleSoft at work to handle payroll, the thing doesn't work as it is, and this certainly isn't going to help.
It's a good thing I still demand my paychecks printed on a piece of paper in an envelope I can carry to the bank myself.
Anything that kills PeopleSoft is a good thing. I don't care how many people use it or how well it may work for some people, it is the Windows of its market (i.e. poorly made, difficult to support, and unreliable as hell, especially when not configured perfectly).
I am feeling fat and sassy
it struck me odd that this admin all but drop the MS case, but wase persuing this one. Too be honest, the admin had little to no chance of winning it, as SAP is the big boy and MS is looming.
But I have wondering why they did persue this one? hummm. payoffs anybody?
I prefer the "u" in honour as it seems to be missing these days.
Hello darkness my old friend.
First point is that this has nothing to do with databases. It is to do with ERP apps of which there are currently 3 major players: SAP, Oracle and Peoplesoft. If Oracle is successful there will be two. Hard to see how this is not less competition, though SAP is so much the market leader that the Oralce/Peoplesoft combined company might be useful to their customers. Its worth noting that Oracle still faces an EU investigation into the bid and, if successful, will to overcome an implacably hostile Peoplesoft board, oh, and gain the support of shareholders for its $7.7bn bid. Also the DoJ has 60 days to appeal Judge Walker's decision.
Rearranging of Deck Chairs on the Titanic IMHO.
Oracle's real interest was making sure that PeopleSoft didn't acquire J.D. Edwards--but Oracle failed in that endeavor. I don't think Oracle actually wants to buy PeopleSoft, but is now forced to "go through the motions," lest they be caught in their act of blatant tortious interference in trying to sabotage the Edwards deal. My guess is that Oracle will lowball the offer and now allow the issue to die. This doesn't even consider the poison pill provisions allowing PeopleSoft clients refunds if Oracle buys PeopleSoft.
One CPU cycle wasted on digital restrictions management is ONE TOO MANY.
Either that, or the "drop the one we can win, persue the one we can't win" plan is a way to make it look like they're trying to keep big business in check, while actually doing nothing effective.
oops, my bad.... M$ is #12 on the list of top contributors. Still, point is the same.
Evolution or ID?
Does anyone find it odd that Microsoft, arguably the largest company seeking to gain and/or retain a monopoly in every market they have ever been in, would be listed as "competition". I'm not having an issue with the change of opinions on Oracle, but MS doesn't seem to be a good example of competition. The fact that they are in the market just tells me there needs to be more competition so they can't simply concentrate on destroying their last big competitor. That's like saying that in 1985 MCI and Sprint can merge because there is competition from AT&T. Am I missing something here?
I hope you're right...
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I mean come on,
she's already the Oracle,
if she gains control of all the people,
what will be left for the Architect to do?
Registration free story is available from the BBC.
My hope is the combination of the two applications into a single application that takes the strength of both worlds. However, I still belive Oracle's statements they intend to "kill" the application. This does nothing for efficiency or customer support.
Furthermore, this will affect IBM and Microsoft as well. Since Oracle's application runs on an Oracle database, my guess is those who use PeopleSoft on a non-Oracle RDBMS (whether it's DB2, SQL Server, or whatever) will be forced into switching to Oracle's RDBMS. The costs and effort for migration to a new RDBMS will be big, and IBM and MS will lose out on RDBMS sales.
SAP may have a new market to tap into - PeopleSoft customers who do not want Oracle's application.
It is not our abilities that show what we truly are... it is our choices.
Finally, an ERP is just such a damn big undertaking. AR/AP, human resources, CRM (which Oracle's product is laughable. Too bad I make a living off of it), inventory, purchasing, manufacturing, planning, sales - all need to be integrated.
While there are "standards" of how to implement all of these products, the teams tend to be distinct and insulated from one another, sometimes taking completely different approaches to how they implement the solutions, making a customization effort quite difficult.
One of the biggest gooches is also the nasty little relationship of ERP vendors and their own consulting firms. They're trying to make money by implementing these products, so the documentation tends to be shoddy and it tends to be very difficult to get real answers on how to do something or how a specific thing works. Hell, Oracle's J2EE architecture is bogus, with most industry standard functions having changed names, making a standard J2EE developer near useless. Well, until you decompile the whole stinking stack to trace back what you need.
And as an aside to the main topic, Oracle has a long history of acquiring firms and integrating their designs. This is nothing new, but it won't be an improvement on the peoplesoft product.
You better watch out, there may be dogs about . .
This doesn't even consider the poison pill provisions allowing PeopleSoft clients refunds if Oracle buys PeopleSoft.
fyi..
The poison pill provisions are separate from the refunds. The "poison pill" allows them to release more common stock to make it very costly for Oracle to gain a majority share. The refunds were something they implemented to allow their customers to get their money back if the takeover goes through.. which was to help their current sales and again to be an additional deterrent to Oracle.
I haven't followed this story carefully, but you appear to have an opinion--why would Oracle care about a competitor acquiring a financial services firm?
--
$tar -xvf
"Generalization of businesses - the underlying assumption of ANY ERP is most of the business processes that will be tracked/automated/integrated are generic and standard to a business and will only require modest tweaking. This is the most blatant of lies the ERP vendors make (niche players excluded). Overgeneralization forces almost a reinvention of the wheel - either changing processes or changing the program. Guess which one happens most ;)"
For years I have thought this is the biggest problems of large ERP/OSS systems. Only large established companies can even afford these packages, but because of all the existing procedures and infrastruture make them the absolute the hardest companies to implement these packages in. Because these packages are so inflexible in their design, small startups, that haven't established their own procedures, are the best suited to implement these packages, unfortunately the price of these packages is prohibtive for a startup.
JD Edwards is/was an ERP software vendor. You are thinking of JP Morgan.
You're 50% correct. ;)
A small start-up type is better off homegrowing IMO. Your system is going to do exactly what you want and you're going to be more flexible than with a standard prohibitively expensive system.
You better watch out, there may be dogs about . .
Maybe Oracle will buy PeopleSoft and transition all users to their own platform.
/I can dream, can't I?
from Capitalism Magazine
( http://www.capmag.com/article.asp?id=3516 )
"I'm Mad as Hell at PeopleSoft"
by Don Luskin (February 13, 2004)
-----
Antitrust laws are supposed to protect us little guys, right? Think again. Here's the story of how PeopleSoft chief executive Craig Conway is using the antitrust laws to deprive his own shareholders of the opportunity to sell their shares at the best price.
I'm a PeopleSoft shareholder - and I'm mad as hell about it.
As you probably know, Oracle has been trying to buy PeopleSoft since last June. It has raised its tender price twice since then, most recently on Wednesday, offering $26 a share - a price PeopleSoft hasn't seen since April 2002.
I'd love to sell my PeopleSoft shares to Oracle at $26 - or to anyone, for that matter. But PeopleSoft CEO Conway won't let me. From the very beginning he has adamantly opposed the deal.
Sure, CEOs are supposed to act like they are opposed to deals like this. It's a form of "playing hard to get" that gets the potential acquirer to bid more money for the company. But Conway is doing something else. When Oracle made its first bid last June, Conway said he "could imagine no price nor combination of price and other conditions to recommend accepting the offer."
So let me get this straight. If Oracle were to bid a million dollars a share, Conway would still oppose the deal? Seems so. And that's where the antitrust laws come in. Conway is using them to make sure that even if Oracle makes a killer bid, the antitrust authorities will kill the deal.
Under the Hart Scott Rodino Act, all corporate mergers must be preapproved by antitrust authorities. You'd think that Conway - working on behalf of his shareholders to get the best price for their shares - would be bending over backward to convince the Department of Justice that an Oracle acquisition of PeopleSoft presents no antitrust concerns. But it's just the opposite.
Conway is trying to convince the DOJ that the "antitrust issues here are significant. In a number of important areas, including the supply of core human-resource management and financial-management software to large corporations and government agencies - PeopleSoft, SAP and Oracle do stand alone. By reducing the number of competitors from three to two...we believe the transaction would harm customers through higher prices and lower customer service, functionality and innovation."
Even if that all were true, Conway shouldn't say it. He's a CEO, not an antitrust regulator. He has a duty to his shareholders to try to make this deal possible - not to get it killed.
And besides, it's not true.
Conway is carefully defining a narrow market - human-resources and financial software for large corporations and government agencies - in order to be able to claim that PeopleSoft, SAP and Oracle are the only important players in that market. But even that specialized market is nowhere near that simple.
For one thing, there are other competitors such as Lawson, SSA Global/Baan and Sage. And a little company called Microsoft has announced it's going to spend billions building what it takes to jump into the fray. And there are also a growing number of outsource providers like ADP and Fidelity who don't just provide HR software, but take on the whole job of running a company's HR function.
And just as important, let's remember who the buyers are in this market: the largest corporations and government entities. These aren't exactly a "victim class" - they're hardly the little guys that the antitrust laws are supposed to protect. When these buyers go out to bid for HR and financial enterprise software, they set the terms - not the software companies.
It must be said that there's more than a little irony in the way Conway is using the antitrust laws to thwart Oracle. Larry Ellison - Oracle's CEO - was perhaps the single most strident advocate of antitrust enforcement against Microsoft, and is now hoist
... or AG Edwards.
Orange whip? Orange whip? Three orange whips.
This was a popular theory early on, but it has soon been proven false. Oracle wasn't just "goin through the motions" when they fought the anti-trust battle with DoJ-- most aquisitors give up at that point (see MS & Intuit or Dish & DirecTV). ORCL would not have spent millions of dollars fighting a battle with the DoJ that many thought they would lose.
BTW the poison pill provisions apply if a PeopleSoft product is discontinued, so ORCL can avoid that by not discontinuing the product or negotiating with each client (which they would probably do anyways, so most clients probably spend millions of dollars each).
(Cost of Business) = (Revenue) + (Small Profit)
(Cost of Business) = (Cost of Sales) + (Cost of R&D) + (Cost of Support)
(Revenue) = (Support Contracts) + (New license fees)
(New license) << (Suport Contracts)
(Cost of Support) << (Cost of R&D) << (Cost of Sales)
Now Oracle plans to eliminate the Sales + R&D Cost, which eliminates most of the new license fee revenue.
(Revenue of Support Contracts) - (Cost of Support) = (Huge Profit)
Clear now?
If programs would be read like poetry, most programmers would be Vogons.
I used to work in a company branch which repackaged software (with a custom packager) after testing it against existing base apps. For example, if a new PeopleSoft application was coming in, we had images of the 4-5 most common desktops/hardware, and the app would be installed on all. Any existing apps breaking or errors in the new app were to be noted and hopefully fixed. This would be back in the win9x days, so DLL-hell was still common.
Of all the culprits for incompatability or causing problems, PeopleSoft apps were the worst. In fact, I used to dread a new PeopleSoft app since often enough if it wasn't killing an existing application, it was just not behaving as expected. Win2k/WinXP have likely solved any DLL conflict issues, but I'd still hate to be the one QA testing a PeopleSoft app in general...
Could someone more business-savvy than I am (which includes most animals with at least a notochord) explain "hostile bidding" to me? Right now I have this image in my head of Larry Ellison saying "I'll give you a hundred million dollars, motherfucker", and that can't be right.
Too many people are treating the stock market like a damn lottery, were they buy in, expect to hit it, then sell the stock in a year or so. The market doesn't normally work like that.
I'm not drunk, I just have a speech impediment. And a stomach virus. And an inner ear infection.
My take is after the DoJ blocked the merger Oracle decided to pursue the case to get rid of the case law that allowed the block in the first place.
Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
I work for state HR (everyone here does the tech side of things). We use PeopleSoft and Oracle. Everyone here is also adamantly against the merger.
First, Oracle's ERP software sucks a lot. We worry PS will die (be swallowed) and be forced to use inferior tools.
Second, we have our choice of DBs right now. We may choose Oracle, but we could choose DB2 as well. If the conditions were to change (software price/quality/etc) we could change. We like having that freedom. I doubt PS post-Oracle would release a DB agnostic product.
-- Political fascism requires a Fuhrer.
As near as I understand it, the judge is effectively saying that Oracle is allowed to "force" the PeopleSoft board to sell?
By what means? If the board is convinced the long-term value of the company is better served by remaining independant, who is the judge to say otherwise? Who is anyone other than the stock and share holders of the business to say otherwise?
I do not fail; I succeed at finding out what does not work.
It's all about cash flows, Oracle talks about operating margins well above 40% on support revenues. I think about 60%-80% of Peoplesoft revenue is support. Oracle can cherry pick the Peoplesoft salesfolk, developers, and managers they want out of the deal, too. It's a pretty good strategy. By the way, what do you do to have such an understanding of these things most folk here missed that point.
Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
If it's not configured properly, it's going to be bad. That applies to whatever package you implement, regardless if it is Oracle, PeopleSoft, SAP etc.. My experience has been that the vast majority of problems with ERP software are either configuration problems or customizations that don't work and play nice with the rest of the software.
...I've read the language around the Customer Assurance Program (what you call the Poison Pill provision) and I've discussed it with pplsoft. It contains language that allows pplsoft to walk away from its license obligations under circumstances that pplsoft controls. In other words, every financial benefit to the customer is offset by the risk to the customer's business that the CAP presents. I won't say any more than this, due to confidentiality requirements. (Sorry!)
I don't know what effect this will have on PeopleSoft, but I really hope it will improve this monstrosity called QUEST for the University of Waterloo.
For those who don't know about QUEST ( which is probably everyone here ), it's a very unstable, slow and annoying system for signing up for courses, reviewing marks, checking your account balance, etc. The damn thing doesn't work half the time, and the processes of adding/dropping/swapping a class is incredibly irritating.
Also, do any other Universities use this thing?
Ever hear of Datatel's Colleague? It's THE WORST of any ERP solution. Guaranteed. It was based on Unidata (ICK!) many a years ago and now they have released a solution that works with Oracle......except it still needs Unidata and some software they wrote to translate their proprietary programming language (Envision) to be able to use Oracle tables. Then they have messes like multivalued fields and weird ass crap and so much stuff the SA has to try to fit in in a 2-4 hour outage window jsut to keep the damn thing running. The release patches on a monthly basis and it's just CRAP! In fact, they have yet another database in thier EDX product called hsqldb. This is opensource javabased database(never seen the GPL or the source code....hmmmm). In any case, I have NEVER seen more layers to a product then I have with Colleague (Benefactor, their Alumni product which we did not buy is very much alike as well). ERP products require institutions to make change to get the product to work the best. I hope peoplesoft does get bought because it's not very good either. Is ERP just so new that it's immature? Or is it that different companies or schools are just so different that it's impossible to shoehorn them into a out of the box product like Peoplesoft??? Is it that they WANT you to rely on their services? Here's another thing that sucks about Datatel. When doing patches, you need people off the system yet when one blows up and it's becuase of something you have not encountered before and you need to call support...there is none because even though phone support is advertised til 8, it really ends at 5 when the person you need to talk to went home and the idiots are all that are left. It really SUCKS when your at a institutuion that uses Colleague sometims. Then again, as much as it sucks, you sometimes see some great things about it too. I am going to say it still sucks more then it is good but even if the suck was smaller, it would still suck if you know what I mean!
Gorkman
Hostile bidding, as I understand it, is when an entity (Oracle, in this case) places a bid for a controlling interest in another company. If 50% + 1 share of PeopleSoft is publicly traded, it is susceptible to a hostile takeover as someone could simply buy up all the shares that are out there and thus own a controlling interest.
Now, some shares are not for sale, and when a company IPOs usually the owners keep a lot of their stock in their personal coffers (not for sale or waaay too expensive) so usually the target company's board is made an offer. Peoplesoft does not have enough of its' own shares to prevent Oracle from acquiring a majority, I guess.... hence the "if you won't accept my offer I'll buy you anyway, motherfucker!" hostility.
As I understand it, anyway.
I believe this merger will affect all current Oracle and Peoplesoft clients and put them at risk for various reasons. First, I doubt that they will develop a unified product in the short term, but instead will keep selling two distinct products while at the same time dropping R&D funding for either of the two. Peoplesoft acquired JD Edwards in 2003 and to this day they haven't merged their products. JD Edwards's clients are complaining about poor product support and organizational problems within the company itself. The ones harmed so far are JD Edward's clients.
Another point worth mentioning is the fact that mergers tend to create internal disorganization. They will focus and invest time and money in reorganizing while neglecting customer service, product improvement and R&D. The only thing they will accomplish with these successive mergers is strengthening SAP's global position.
yeah because it would have been SOOO different with a democrat in the whitehouse.
really it would have.
wait no it would be exactly the fucking same thing.
The same payroll system is behind the scenes, calculating and printing your paper check...only now a dozen people handle it and see it before it gets to you. Peoplesoft doesn't have anything to do with NACHA. Direct Deposit is still WAY more secure, and WAY more reliable than your paper and envelope.
"Is ERP just so new that it's immature? Or is it that different companies or schools are just so different that it's impossible to shoehorn them into a out of the box product like Peoplesoft???"
Yes. There's three main issues.
ERP is immature (sort of, the chunky sexy name ERP is newer than the concept of integrated business processes)
Companies are different and are more willing to invest money in software change rather than process change - many non-tech companies still view (even post dot-bomb) technology as a panacea. Broken processes can be fixed by the Next New Thing. This is a twofold problemm and not entirely on the shoulders of ERP vendors. But they are willing to imply that their tech is the solution. They do deserve the blame for that.
Finally is the gap between what a developer sees and what a user sees. See Copeland's book The Inmates Are Running The Asylum for a wonderful look at the main issue facing ERP vendors today.
The ERP market is wide open even with the limited competition, even IF the big guys attempt to stifle new competitors. Because the products that are out there are garbage from a usability standpoint.
The toughest part is convincing a company that the millions spent on Oracle was a poor investment. Hard to do. Ego and jobs are on the line with that kind of admission. Hence most companies plodding along with a poor solution.
Government agencies are an interesting case study right now, being less bound by profitability, and allowed to simply spend more money and try try again.
For example, Bearing Point attempted to implement Oracle at the VA in Florida recently. They just pulled the plug on the implementation (millions of dollars later) and the DA announced recently that a criminal investigation is underway.
Part of that is obviously BP's fault, but a fair amount of the blame rests on Oracle's shoulders for a shoddy product. Heck, Oracle's Federal offering is very immature at this point and is sort of "bolted on" to the existing commercial application. This comes with the inevitable kruft and shoddy interfaces.
Now you know why I'm bitter and drunk.
Well, I'm not drunk yet but it IS Friday.
You better watch out, there may be dogs about . .
So I guess anyone reading this that is a courier for a bank should probably start looking for another job.
You are undoubted correct, and I do preferr direct deposit personally, but a group of us at a former employer found out that the employer is allowed to do "correcting transactions". Well this former employer decided that they needed the funds tied up in what would have constituted our last paychecks ( unbeknownst to most of us ). So they had the payroll company do a "correcting transaction" to suck the money they had paid us ( that last paycheck ) back out. Both transactions happened off hours, moments from each other, for a lot of us. Those who got checks kept their money, as I understand it ( any ex-iFusioneers to correct me? ).
Course, they proceeded to run the company into the ground on that money anyway...
emt 377 emt 4
of course, the controlling interest is usually around 25% of the shares.
> See Copeland's book The Inmates Are Running The Asylum for a wonderful look at the main issue facing ERP vendors today.
It's Alan Cooper, not Copeland.
I mean the product is really pathetic. It didn't really become competitive for, what, 15 years already? In fact that have more apps developers than core database ones, so apps sucks the fortune they make on their bread-and-butter rdbms. "DB market is saturated and the growth is in applications?" Apparently oracle proved this thesis wrong.
Whoops, you're right. I'm an idiot.
You better watch out, there may be dogs about . .