October 28th, 2004
Should Larry forget PeopleSoft?
Despite clearing the last regulatory hurdle in its bid to takeover PeopleSoft, some are beginning to wonder if the deal makes any sense for Oracle. Lisa DiCarlo, a senior editor with Forbes.com, argues that Oracle would be better off acquiring an infrastructure company rather than an applications company, pointing out the small slice of Oracle’s revenue (14%) that came from applications in the company’s latest fiscal quarter results. A better play, she says, would be BEA Systems, since it would give Oracle leverage against IBM and Microsoft in both the database and middleware business. Earlier this month Oracle short-listed BEA Systems as one of its takeover options. Another issue is PeopleSoft’s partnership with IBM, which will certainly dissolve if the takeover occurs. It would leave Oracle with a headache undoing the progress PeopleSoft makes with integrating IBM’s infrastructure and middleware into its products. Nonetheless, after clearing hurdle after hurdle, Oracle may not be so quick to change direction at this point, and analysts are hinting at victory. After looking into its crystal ball, Gartner recommends PeopleSoft customers to consider and weigh the affects of four possible scenarios though 2006.
