PeopleSoft renews refund offer to counter Oracle
- 28 August, 2003 12:13
PeopleSoft has reinstated a "customer assurance program" through which it would refund the purchase price of its software to new customers if the company is bought out and the next owner decides to discontinue Peoplesoft products.
The program could cost Oracle as much as $US391 million if its attempted buy-out of rival PeopleSoft takes place.
The refunds would be two to five times the value of the customer's contracts, said PeopleSoft spokesman Steve Swasey.
The enterprise software vendor first instituted a money-back guarantee program in June after Oracle announced its hostile bid for the company. PeopleSoft discontinued the program at the end of June after signing up an undisclosed number of new customers.
It's bringing the program back now, Swasey said, because the Oracle takeover bid is still in play. "There has been a lot of uncertainty caused by Oracle," he said. "This thing has lingered on".
Oracle originally said it would move PeopleSoft customers to its own products if the merger were to occur. But the company backed off that plan after negative reaction from PeopleSoft users.
Swasey wouldn't say how many new customers took advantage of the first assurance offer. No expiration date has been set on the latest offer, which will continue into the company's third quarter for now, he said.
Oracle spokeswoman Deborah Lilienthal said PeopleSoft's latest customer assurance offer "is nothing more than an unsustainable gimmick to close deals. It's a hollow rebate offer, and it is a moot point because Oracle will support all of PeopleSoft's customers for a period that far exceeds the support deadlines that PeopleSoft intends to meet."
Oracle's second and latest tender offer for PeopleSoft expires at midnight September 19. The value of the deal is $7.5 billion, up from the original $5.1 billion offer Oracle made in June.
Following Oracle's announcement of its takeover plans in June, PeopleSoft sued Oracle to try to stop it from proceeding with its plans. In the lawsuit, which has been amended, PeopleSoft accused Oracle of unfair business practices, trade libel and tortious interference with PeopleSoft's customer relationships.