Oracle vs. PeopleSoft David Fox James Hill Matt Tschabold

1
Oracle vs. PeopleSoft

• David Fox
• James HillMatt Tschabold

2
Overview

• Oracle
• PeopleSoft
• Why The Take Over?
• What is ERP?
• The Takeover
• Major Players
• Recap

3

• Founded in 1977
• Founded by Larry Ellison
• Roughly 55,000 Employees
• Services provided include
• Database Software
• Security
• Data Warehousing
• Enterprise Management Software
• Consulting
• RFIDs, Radio Frequency Identification
• and more

4

• Founded in 1987
• Founded by Dave Duffield Ken Morris
• Primary Focus on ERP Software
• One Week before the start of the Oracle hostile
  take over PeopleSoft offered a bid to take
  over J.D. Edwards for 1.7 billion, which would
  have made PeopleSoft the second largest ERP
  software company

5
Why?

• To begin Oracle was in a database market with
  stiff competition and profit margins becoming
  slim and markets becoming stale
• Oracle needed to expand into a newer market
  which would help it regain their success
• ERP, Enterprise Resource Planning, was seen as
  one of the waves of the future and an attractive
  market to enter
• To pursue ERP software there were two options
  development or acquisition
• Oracle chose to acquire a company and found only
  two options PeopleSoft and SAP
• A restructuring led to an attempt at an ERP
  induced takeover with PeopleSoft rather than SAP
  due to the total cost and feasibility

6
Enterprise Resource Planning, ERP

• What is ERP?
• Management Information Systems integrating and
  automating business practices associated with the
  operations or production and distribution aspects
  of a company engaged in manufacturing products or
  services.
• ERP incorporates
• Manufacturing, Logistics, Distribution,
  Inventory, Shipping, Invoicing, Accounting.
• By bringing in an ERP consultant each firms
  receives a unique ERP system which integrates all
  of the functions above though a highly complex
  software system.

7
Enterprise Resource Planning, ERP

• Why ERP?
• Advantages
• With out a system in place, software
  applications may not be able to communicate in an
  effective interface.
• It can change how a product is made either more
  efficiently of effectively.
• Computer securities included with each ERP
  system to prevent internal and external theft and
  data tampering.
• Front office and back end operations can be
  integrated using an ERP model.

• Disadvantages
• Inadequate levels of investment and ongoing
  training for the personnel involved.
• There are limitations to ERP programs.
• Success depends on skills of the workforce,
  personnel turnover, expensive to install, ERP
  vendors charge annual license fees, tech support
  issues, ERPs are sometimes seen as too rigid and
  difficult to use, can suffer from weakest link
  problem, high switching costs.

8
An Overview of the Hostile Takeover

• June 6th 2003 Oracle begins with by ambushing
  PeopleSoft with a hostile takeover bid of 5.1
  billion
• Bid takes place days after PeopleSoft agreed to
  a 1.7 billion dollar deal with JD Edwards
• To resist the take over bid and bids in the
  future PeopleSoft pursued many options
• reassurance to the shareholders of both higher
  profitability and reliability without a merger
• poison pills spread throughout the attempt
• better severance packages for staff
• Anti trust lawsuits on competitiveness
• July 18th 2003 PeopleSoft completes its merge
  with JD Edwards

9
An Overview of the Hostile Takeover continued...

• Oracle takes suit against PeopleSoft in the first
  of many court battles to get poison pills removed
• In February and March of 2004 both the DOJ
  European Commission agree that the deal was anti
  competitive further halting the attempted
  acquisition
• Microsoft announces serious consideration into
  an acquisition of SAP
• This announcement works in favor of Oracle
  claiming that due to stronger competition the
  merger will not be anti competitive
• As a result of this information and a long court
  battle, Oracle is victorious in their claims of
  having the merger not being anti-competitive

10
An Overview of the Hostile Takeover continued...

• After the lawsuit on anti competitiveness was
  resolved Oracle once again bids on PeopleSoft
• Severance packages are increased as a result
• PeopleSoft fires Conway due to lack of faith in
  his leadership ability
• Claims on the true worth of PeopleSoft by the
  founder of PeopleSoft circulated
• Once again the courts intervene to gauge what
  the true worth of the company is
• In the court cases Oracle promises to support
  PeopleSoft customers until 2013
• As a result of these actions Oracle brokers a
  deal to close out the acquisition at 10.3 billion

11
Major Players

• SAP
• Oracle Applications
• Microsoft Dynamics (Formerly Microsoft Business
  Division)
• The Sage Group
• SSA Global Technologies
• Lawson Software
• Visma
• Industrial and Financial Systems
• Exact Software
• QAD
• Epicor
• NetSuite
• SIV.AG
• 24SevenOffice

12
Recap

• Oracle
• PeopleSoft
• Taken Over Prompted by Oracles Desire to Have
  ERP
• ERP is Designed to Improve Productivity
• The Takeover
• Major Players