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.'"

Comments

Point

[leonmergen]

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...

Re:Point

[lucabrasi999]

there is plenty of competition around in the database market

This case not related to the database market. Oracle is trying to acquire PeopleSoft in order to improve their position in the applications market. This includes things like HR, Payroll, Accounting and Purchasing systems.

Re:Point

[Ronald Dumsfeld]

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.

This ain't about competition in the database market, it's about competition for ERP software. These work on top of a database, and many ERP packages allow you to choose the underlying database.

I think this is a dreadful decision, Oracle's ERP offering is horrid, and the intent is simply to kill a competitor. If the takeover does go through I hope the clients Oracle is hoping to acquire go elsewhere. What is even more scary is to discover that Microsoft has considered buying SAP. That would instantly give MS a huge market share in back-end business software. You can bet that SAP on non-MS platforms wouldn't be kept up to date with features despite the fact that it runs like a two-legged dog when implemented on Windows.

Re:Point

[Anonymous Coward]

Microsoft have considered buying SAP have they? Don't make us all laugh now. SAP is as big, if not bigger, than Microsoft. Now, Microsoft and SAP were at one point talking about a merger but it was only ever at a very simple level, and nothing ever came to it. Besides which if Microsoft and SAP were to announce a merger the DoJ and EU Monopolies Comission would have a field day.

Re:Point

[skaffen42]

Microsoft have considered buying SAP have they? Don't make us all laugh now. SAP is as big, if not bigger, than Microsoft.

Dude, what have you been smoking? SAP has a market cap of about $46 billion and anual revenue of about $9 billion a year. Microsoft has a market cap of nearly $300 billion and revenues of around $37 billion a year. So I'm not really sure how you can claim SAP is as big as MS.

For comparison, Oracle has a market cap of $51 billion vs. Peoplesoft's market cap of $7 billion. Looking at it that way, the ratio in sizes between MS/SAP compared to Oracle/Peoplesoft is about the same.

Draw your own conclusions...

Well, this is just great.

[senatorpjt]

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.

Re:Well, this is just great.

[LostCluster]

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.

Funny, I perfer "Direct Deposit", "ACH Transfers", and "Online Bill Pay" because when properly configured computer systems move my money, I see there less risk of it going wrong. Paper checks can get lost in transit and take several days to clear, but with electronic transfers the transaction clears instantly and I get access to the money that's rightfully mine immediately rather than having to wait up to a week for processing to happen.

Re:Well, this is just great.

[Otter]

I prefer direct deposit because it eliminates the (disturbingly likely) possibility of my spilling ketchup on my paycheck or putting it in my pocket, forgetting about it and running it through the washing machine.

well

[nial-in-a-box]

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).

while I do not want to see Oracle get People Soft,

[WindBourne]

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?

not out of the woods

[Anonymous Coward]

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.

Re:not out of the woods

[LostCluster]

"3 major players"... but there are a ton of industry-specific ERP-ish systems out there for every industry you can think of ranging from office supply sellers to construction project managers. Also, there's plenty of business out there who skip over the full marketplace and hire a programmer to make their own resource tracking program using tools as simple as Microsoft Access which works great for a truely small business even though its scalablity is limited.

I agree with the judge here... the ERP software field is filled with players small and large. There's no monopoly risk in letting Oracle and PeopleSoft merge... just like there's far more places that sell hambugers than McDonald's and Burger King. Just because their two of the biggest, doesn't make a merger that creates a monopoly possible.

Re:not out of the woods

[jedidiah]

ERP systems are far less interchangeable than low quality hamburgers. Claiming that there are hundreds of Lilluputians in the market does nothing to counter the problem of market dominance by a few small players.

The Judge's reasoning would only work if someone could point to a 4th player willing, ready and able to take up the slack when the #3 player sabotages the #1 player.

Be interesting to see if they actually acquire now

[base3]

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.

Karma-whoring

[genixia]

Registration free story is available from the BBC.

Re:it's not architectures

[BitterAndDrunk]

It's a combination of a few factors: (this is from my work implementing SAP and Oracle)

1. They're not designed with an end user in mind - they're designed to make the accounting package interact with every other bolt-on module. What occurs is a programmer with no idea how to, say, plan a line is put in charge of developing all the forms and interfaces for that type of job.
2. Kruft/feature creep - Customer A wants a feature to shine the shoes of his CEO and accompanying sycophants. Oracle says "ok" and implements it on top of preexisting flows. The documentation may or may not be updated.
3. 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 ;)

4. 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.

Clarification?

[Mr. Bad Example]

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.