As the Oracle Corporation pursues its bid to buy PeopleSoft Inc., colleges that have spent millions of dollars on PeopleSoft software to manage their institutions are upset and angry. Administrators want reassurances that they have not wasted those millions if the deal goes through.

With the hostile takeover attempt now in its second month, Oracle "has not done a very good job of marketing their efforts or their motivations," says David O'Neill, director of information technology at Boise State University.

PeopleSoft has sued Oracle to try to prevent the sale (The Chronicle, June 27).

Oracle is telling customers of PeopleSoft that it wants them to switch to its own business software, which makes it appear that Oracle wants to buy PeopleSoft and "kick everybody down the stairs," Mr. O'Neill says. "That's not been my experience with Oracle in the past, so I really don't understand."

But the public comments of Lawrence J. Ellison, Oracle's chairman and chief executive officer, have hardly been reassuring, Mr. O'Neill says.

Many colleges, including Boise State, have enjoyed a good relationship with Oracle, Mr. O'Neill notes. Some use Oracle's database technology for storing data from financial-aid and payroll transactions within their institution's PeopleSoft systems. But college officials worry that a takeover of PeopleSoft by Oracle would force them to switch from PeopleSoft's Student Administration software, for managing academic and financial records, to the Oracle Student System, a newer product, which is part of the Oracle E-Business Suite.

"I don't believe Oracle has a [student] product that is competitive with PeopleSoft," says John Van Cleve, director of information-technology services at Gallaudet University.

Michael Sperling, a spokesman for Oracle, says it would be "premature" for the company to discuss prospective support for specific PeopleSoft products, like Student Administration. "We're not commenting on a specific product level at this time," he says.

Mr. Sperling advises PeopleSoft customers to check Oracle's Web site for information. A news release on the site says "Oracle will continue to develop and improve PeopleSoft's products for at least the next 10 years -- even longer, if customers require further support."

Some industry analysts have speculated that if Oracle does buy PeopleSoft, it might use the newly acquired software developers to make the Oracle Student System more competitive in the marketplace.

For now, only two American colleges use Oracle Student System -- the State University of New York College at Buffalo and the University of San Diego. Eleven others have purchased the software, and six of them are in the process of installing it, Mr. Sperling says.

By contrast, hundreds of campuses use PeopleSoft's competing software, says the company's higher-education user group.

Expensive Prospect

For colleges that have already spent millions of dollars on software and consultants to install PeopleSoft systems, the prospect of having to spend more because of an Oracle takeover is "kind of scary," says Bernard W. Gleason, an Internet-strategy consultant at Boston College. "It's really unhealthy what's happening."

The University of Connecticut has allocated $20-million for new PeopleSoft systems and is halfway through its installation of the Student Administration software. It has also purchased PeopleSoft's Human Resources software but has not yet installed it.

The university is backing an antitrust lawsuit against Oracle, which Connecticut's attorney general and other state officials filed last month, after the company began its hostile-takeover bid. The state is in the midst of a $100-million conversion of its central computer systems to PeopleSoft's software. The attorney general and the state controller "are in the driver's seat on this one, and we're supporting them," says Randy M. Bell, the university's vice chancellor for information services.

The Kentucky Community and Technical College System, with 26 colleges and 65 campuses, has spent $14-million to convert all of its core administrative systems to PeopleSoft.

North Dakota is well along toward completing a $30-million PeopleSoft project that includes all state agencies and the 11-college North Dakota University System.

Administrators of affected institutions say they not only are unhappy about Oracle's attempt to buy PeopleSoft, but also are puzzled by the "in your face" manner in which Oracle has gone about it. "I don't think it's been smartly handled," says Mr. Bell.

In fact, few administrators see anything good for their colleges in an Oracle takeover of PeopleSoft. "We don't think it will be to our benefit," says Jon Hesseldenz, vice president for information technology in the Kentucky system. "I think we'd find it disruptive almost immediately."

Some administrators are concerned that their colleges would not enjoy the same service or attention from Oracle, a much larger company. Even now, "it's difficult" to be heard in a company the size of PeopleSoft, says Boise State's Mr. O'Neill.

Some colleges' chief information officers say that it has taken nearly five years to reach a point where the money they have spent on PeopleSoft products is beginning to pay off. A hostile takeover, they fear, could negate the gains in efficiency that they are only now beginning to realize.

If Oracle were to acquire PeopleSoft and do nothing more to enhance the software, colleges could probably operate for a while, Mr. Hesseldenz says, estimating that "We would have about four years where we could live without enhancements and continue to run PeopleSoft." But then, he says, the technology would become outdated, and colleges would have to look for alternatives.

If Oracle wins its takeover bid and PeopleSoft users feel that they are forced to find an alternative, colleges would have other options besides Oracle, administrators note. SAP America Inc., the SCT Corporation, Datatel Inc., and Jenzabar Inc. also make software for running colleges.

"You can bet if things turned out that way," says Grant Crawford, chief information officer for the North Dakota system, "Oracle would not be among the favored few."