Jen Ibanez is not a fan of Oracle Corp. chairman Larry Ellison's plan to scrap PeopleSoft Inc.'s products if his $5.1 billion hostile takeover attempt succeeds.
Her Denver-based technology staffing company chose PeopleSoft after a year-long search during which it considered software from 34 different vendors. "PeopleSoft had the best solution for the best price," said Ibanez, director of operations of The Remy Corp., which bought the software three years ago.
Not only did PeopleSoft's human resources and financial software pay for itself in six months, it helped staffers close more deals, Ibanez said. "We are able to close deals in a matter of hours as opposed to days and weeks, literally from the point of finding the candidate, matching the candidate to the correct position to getting the contracts done," she said.
So when one of the company's East Coast employees woke her in the early morning hours with the news that Oracle had PeopleSoft in its sites, Ibanez immediately grew concerned. Nearly a week later, she is more sanguine, convinced that Ellison is out for publicity, not to buy PeopleSoft.
"This is not something we take too seriously in terms of the impact on us," she said. "We feel more confident than ever in PeopleSoft's ability to thrive."
Many PeopleSoft customers are circling the wagons. Boosting the company's products could increase its chances of survival, thereby sparing them a costly and potentially messy transition to new products.
PeopleSoft has reached out to customers, assuring them that Chief Executive Officer Craig Conway is moving forward with its planned merger with smaller rival J.D. Edwards & Co.
Bobby Ho, senior human resources information systems analyst for Tustin-based Ricoh Electronics Inc. in Southern California, which has used PeopleSoft's human resources software for about six years and is considering buying more software from the company, said he got a call from PeopleSoft.
"I feel confident," Ho said. "I don't think it'll change our potential purchase."
That confidence might wane if Oracle sweetens its offer, which analysts consider too low. "That would make you think twice about spending thousands of dollars on a module that would go away," Ho said.
Most troubling to PeopleSoft customers is that Ellison has pledged to stop selling PeopleSoft products and roll the best features into Oracle products. He said Oracle will offer free "upgrades" to its products. The pitch that moving to Oracle's products would be the equivalent of a software upgrade sounds hollow to some customers.
"They're not going to make any friends that way," said one customer, who spoke on the condition of anonymity. "I don't think high-handed tactics will be well received, by myself or the industry."
Oracle could have a mutiny on its hands. Some customers who spoke with the Times say they just want an uninterrupted supply of PeopleSoft updates and features. They said they would shop rival software makers if Oracle succeeds in buying PeopleSoft.
"We've heard that (Oracle is) not exactly the greatest (human resources) system," Ho said. "I think that's what most customers will do. I don't think they'll just say, 'We'll go to Oracle.'"
Oracle's business software applications were plagued by early flaws. But customers say they are also concerned about Oracle's famously testy relationship with customers. PeopleSoft built its early success on customer service. Oracle built its early success on a hyperaggressive, high-pressure sales force.
That reputation for hardball tactics could complicate Ellison's gambit to land PeopleSoft's 5,100 customers, including the California State University system, Ford Motor Co. and PepsiCo.
"They have chosen PeopleSoft because they prefer not to be customers of Oracle," Stanford business professor Jeffrey Pfeffer said.
Oracle has taken steps to patch up its relationship with customers. Last fall, Oracle announced it would publish a price and licensing fact sheet for prospective customers to provide greater "transparency" in purchasing decisions.
Not everyone views Oracle's bid for PeopleSoft as a bad thing. To Brendan LaBonte, director of software development at Texas Tech University, the bigger Oracle becomes, the better.
"The merger makes them more of a major player," LaBonte said. "There's a more of a chance we'd select them."
Texas Tech already runs Oracle's database software, and is eager to move to a suite of business software applications to replace the varied assortment of programs the college now uses.
"My feeling is Larry Ellison is very confident in his product, and he thinks it's superior to anything out there," LaBonte said. "In a lot of ways, we agree with him."
John Matelski, deputy chief information officer for the city of Orlando, which has used J.D. Edwards' financial software since 1998, disagrees. He said he couldn't imagine switching to Oracle software because of the company's lack of concern "for what the customer's desires are."
He is keeping his fingers crossed that the Oracle bid will fail and the merger with J.D. Edwards will go through as planned. "We will continue to stick with them, as long as they are a viable company," Matelski said of J.D. Edwards.
Even if PeopleSoft and J.D. Edwards seem to have a lot of fans, the uncertainty prompted by Oracle's hostile takeover attempt could sharply curtail sales.
"There is a danger that if things go on, you could become irrelevant in the applications market," said Alan Pelz-Sharpe, an analyst with Ovum, a technology consulting group. "You may convince them that your technology is better, but you may not convince them that you're a long-term bet."