PeopleSoft: Takeover TensionsBy Baselinemag | Posted 2004-08-01 Email Print
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PeopleSoft's software is easy to use, say customers. But many are worried their investments will be jeopardized if Oracle wins its takeover bid.
But never mind that: The sword hanging over PeopleSoft's head is an unwanted takeover attempt by Oracle, which extended its $7.7 billion offer to PeopleSoft shareholders through the end of August. The U.S. Department of Justice is trying to block the deal in federal court; a decision in the case is expected in September. PeopleSoft customers are particularly spooked at the prospect that Oracle would cease development of the PeopleSoft applications, even though Oracle claims it would continue supporting them for at least 10 years.
Gwinnett County Public Schools is in the third year of a $40 million rollout of PeopleSoft financial, human-resources and supplier-relationship management software. "We've made an investment, a huge investment, in the software and in implementing it," says Jeff Weiler, chief financial officer of the Georgia school district. He says his team already evaluated Oracle's products and found them inferior. "We had a chance to go with Oracle, and we'd rather not end up with them by default," he says.
Larry Bastianelli, fiscal systems manager at Beth Israel Deaconess Medical Center in Boston, says PeopleSoft provides better tools and support for customizing its software than offerings from competitors: "With PeopleSoft, it's not like, 'Take it or leave it,'" he says. For example, the requisition-approval workflow in eProcurement provides only one level of approval. Bastianelli says the hospital's approval requirements are based on the dollar amount of the item being purchased and the buyer's job role, and his team easily customized the software to fit that process.
However, some say PeopleSoft needs to stitch its software modules together more tightly. Northwestern Memorial Hospital runs PeopleSoft 8.0 financial, human-resources and supply chain applications. When it deployed eProcurement in late 2002, the hospital had to write its own interfaces to translate data with the other PeopleSoft applications, says Lara Latham, director of materials management. "It's not plug-and-play," she says. "PeopleSoft has some work to do."
Peoplesoft Operating Results*
* Fiscal year ends Dec. 31; YTD reflects first six months
Source: coMpany reports Other Financials**
Total assets - $4.31B
Stockholders' equity - $2.98B
Cash and equivalents - $542.47M
Long-term debt - None
Shares outstanding - 368.52M
Market value as of 7/27 - $6.32B
** As of June 30, 2004, except as noted