PeopleSoft Announces Alliance with IBM

Kyle writes "I just got out of PeopleSoft's opening keynote for PS Connect 2004, where Craig Conway announced a new alliance with IBM. According to Conway, PeopleSoft and IBM will both be investing $1 billion over the next few years to build a joint solution utilizing PeopleSoft's applications and IBM's middleware products. Yahoo Business has an article."

Comments

Ellison

[angst_ridden_hipster]

... was heard to say "Never mind. I'll just buy them too."

Kind of interesting, actually. These could be the first hairline fractures in the Vast Anti-Microsoft Pro-Linux Corporate Alliance.

It could have potentially profound effects in the world of Corporate Linux. Then again, it probably won't. Expect the MS and SCO FUD machines to spin it that way, though.

Oracle may be big, but going up against IBM is a bad strategy. As the old joke went in the "IBM is gonna buy Apple!" days:

Q: What do you get when you cross Apple and IBM?
A: IBM.

whopper pie in the sky guess

[Elwood P Dowd]

After Oracle first made it's pennies-on-the-dollar bid, PeopleSoft said, "It's ok, we'll guarantee support, or your money back."

They were hoping it would be a poison pill. But Ellison just said, "That was stupid. You aren't maximizing shareholder value. We'll still buy you, but it'll be a lower price."

And customers still fled PeopleSoft, because "your money back" doesn't compare to implementation costs, which are much larger than purchase price. So, PeopleSoft could have said, "Ok, we'll even cover implementation costs!" and then it would be awfully expensive for Ellison to buy the company and terminate support for PeopleSoft's database products.

But then the chance of a shareholder suit would have gone way up.

I'm curious if this new deal with IBM says, "We both will invest <large value> in this new product. And if either of us breaks contract (like an Ellison owned PeopleSoft might want to) then we owe the other guy <large value>." in order to be a more significant poison pill for Ellison. And this poison pill might be easier to defend in a shareholder suit.