BusinessCompany NewsThree’s a crowd for Larry

Three's a crowd for Larry

Seemingly unfazed by PeopleSoft's success in wrapping up its $1.8bn (£1.1bn) $14.84 a share acquisition of JD Edwards, Oracle maintains it will press ahead with a deal for PeopleSoft.

This is small wonder. Despite the mammoth figures being bandied about, the ego is running the show again. And one of the biggest egos in the world of business has to belong to Oracle CEO Larry Ellison.

The sharp-dressing Californian looks more like a character from LA Law than the owner of the second-largest software company in the world. Geek he is not. Hard-nosed businessman he is. And it is precisely this that will be making customers of all three companies hot under the collar.

Ellison is quietly seething about dropping from number two in the business software world (a combined PeopleSoft/JD Edwards has a larger global market share). German software giant SAP continues to lead the pack and will no doubt mop up any disgruntled customers.

The fact is that when egos run acquisitions the one cog in the machine that tends to lose out is the customer.

Oracle has already stated that, should a deal go through, it will discontinue PeopleSoft’s products.

Although it will continue to support the technology for a number of years, the message is a clear one.

A colleague described the ongoing software love triangle as the most interesting thing to ever happen in the software industry. And while I agree, it’s interesting for all the wrong reasons.

It is interesting because it is the starkest example yet of industry consolidation and the problems it brings. Consolidation means a lack of choice. A lack of choice means a lack of competition. And a lack of competition often sees customers getting shafted.

While it would be difficult to level such accusations at the accountancy profession, there are parallels to be made. Did we not enjoy a Big Eight at one time? If Equitable Life has its way, we might be down to a Big Three, something the likes of David Illingworth and Peter Wyman claim is simply unworkable.

Well if Oracle gets its way in the business software market, we will soon be reduced to a Big Two of Oracle and SAP. Make of that what you will.

  • David Rae, technology editor of Accountancy Age.

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