TechnologyOracle takeover will not divert PeopleSoft users

Oracle takeover will not divert PeopleSoft users

PeopleSoft customers are unlikely to switch to a new software supplier following the company's acceptance of Oracle's $10.3bn takeover bid, say analysts.

Link: Oracle finally gets PeopleSoft

The bitter 18-month battle to buy PeopleSoft that finally concluded last week – after Oracle raised its offer by $2.50 to $26.50 a share – will make the combined company the world’s second largest business application vendor behind SAP.

‘This merger gives Oracle even more scale and momentum,’ said Oracle chief executive Larry Ellison.

Philip Carnelley, research director at analyst Ovum, says the deal is good news for the industry, and for both companies’ clients.

‘PeopleSoft’s customers had been suffering from uncertainty over future directions. At least now they’ll get some certainty, even if they don’t like the outcome, which now seems rather better than feared,’ he said.

Oracle has promised to continue developing the PeopleSoft 8 and JD Edwards 5 applications, as well as extending support for the products into the future.

AMR Research analyst Jim Shepherd says most PeopleSoft customers will eventually accept the idea of Oracle as their application vendor, with few opting to stop paying maintenance fees or look for replacement applications.

‘While there are often emotional and vocal reactions to acquisitions, it is very difficult to justify replacing your business system because you don’t like the new owner,’ he said.

Ellison added that middleware software provider BEA systems might be an attractive future target for Oracle.

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