Oracle e-mail shows losses to PeopleSoft, spin efforts

Oracle e-mail shows losses to PeopleSoft, spin efforts

As Oracle continues its takeover attempt for PeopleSoft, internal email messages have revealed the competition between the two companies to win customers and Oracle's efforts to woo industry-watchers into supporting its unsolicited bid.

The email messages were distributed by PeopleSoft representatives last Friday in connection with a court case the firm filed against Oracle, claiming that the company is employing unfair practices in its takeover bid, including efforts to disrupt PeopleSoft's relationship with customers.

While Oracle's vice-president of analyst relations, Peggy O'Neill, dismissed the suit in an email dated June 13 as "frivolous", and said that PeopleSoft was in "disarray," other email messages reveal the threat PeopleSoft represented to the world's number-two software maker amid increasing market consolidation.

PeopleSoft won more deals against Oracle in two quarters of Oracle's fiscal year 2003, according to an email sent by Oracle executive vice-president of applications development, Ron Wohl, to company leaders.

PeopleSoft won 55 per cent of the deals up for grabs against Oracle in the fiscal third quarter and 51 per cent of the deals during the fiscal second-quarter, the email stated. While Oracle pulled up its percentage of winning bids in its fiscal fourth quarter, scoring 51 per cent against PeopleSoft, there was "no steady trend" of improvement, Wohl wrote.

However, Oracle executives comment in the messages how PeopleSoft has been weakened by its takeover bid.

"We've certainly wounded PSFT [PeopleSoft]," O'Neill wrote in an email dated June 7. "Even if we don't close this deal, this is going to take PSFT time to recover."

The correspondence also underscores the dilemma facing customers. Not only are PeopleSoft and Oracle customers affected by the takeover bid, but so are customers of J.D. Edwards & Co., which PeopleSoft recently acquired. All three groups of customers face questions as to whether or not their software will be supported amid a market shake-up.

Oracle executive vice-president, Chuck Phillips, conceded in at least one email that shifting platforms was not easy. "Migrating between releases is never cost free and consulting is involved," Phillips wrote in an e-mail dated June 24. "We never said otherwise and that's a fact of life as anyone remotely familiar with software knows,"

Oracle has said that it has no plans to continue selling and promoting the PeopleSoft product lines if the acquisition goes through, but that it will continue to support the PeopleSoft products for 10 years and help customers migrate to Oracle.

But despite the platform shifts customers may face, the emails show that Oracle worked hard to get out its message that the takeover would pay off in the end.

Several email messages detail its efforts to influence analysts, and in one case O'Neill reviews and comments on a draft report from Giga Information Group analysts, saying she is concerned about their "tone and balance."

"The drafts we've seen so far seem to be more occupied with beating Oracle up for its behaviour rather than give advice to end users," O'Neill wrote. "I urge you to take a second look at this,"

O'Neill goes on to write that PeopleSoft, Oracle and J.D. Edwards' customers were probably "anxious" and that they were looking at Giga to help "educate them and calm them down".

In fact, analyst and media relations are a focus of many of the released email messages. In one, O'Neill boasts to Phillips about her ability to win over an analyst at AMR Research.

"See how influencable [sic] they are when we give them a little love!," O'Neill wrote in an email dated June 7. "We deliberately courted Bruce because he has a 'strong voice' within AMR, he is able to drown out/mute other negative opinions from his colleagues."

Oracle representatives in Europe could not immediately comment on the released email messages Monday morning. Representatives for Forrester Research, which owns Giga, were also not available.

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