PeopleSoft – Hard Road Ahead
from the the-art-of-war dept
Someone anonymous writes “Eric Hellweg of Business 2.0 says there’s a hard road ahead for PeopleSoft in his latest Tech Investor column. “PeopleSoft investors should brace themselves for even more bad news. When Ellison announced his bid for the enterprise software firm, which is based in Pleasanton, Calif., most observers reasoned that he was trying to scuttle the proposed merger between PeopleSoft and JD Edwards…. But I think there’s another, more ruthless reason for the timing of Ellison’s bid: It comes during the final three weeks of PeopleSoft’s second quarter, which closes on June 30… Why is that timing so important? Because in the world of enterprise software, most sales take place during the last month of a quarter. And any company considering signing a multimillion-dollar contract with PeopleSoft is now confronting the possibility that the software package it’s buying will be phased out if Oracle takes over.”” The NY Times makes a similar argument, saying that Ellison’s claims that PeopleSoft is overvalued may become self-fulfilling. Since this fight is going to seriously harm PeopleSoft’s ability to close end-of-quarter deals, its next earnings report will reflect much lower-than-expected earnings. Of course, if this is true, PeopleSoft’s “damages” claims against Oracle may be even stronger.