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Oracle Buys PeopleSoft for $10.3 Billion

By Nate Mook | Published December 13, 2004, 10:27 AM

Putting to an end over a year of resistance and heated courtroom battles, PeopleSoft has agreed to be acquired by Oracle for a total of $10.3 billion in cash. Oracle finally met the approval of PeopleSoft's board by raising its offer from $24 to $26.50 per share.

The deal will help Oracle better compete in the enterprise application market against giants such as SAP by adding PeopleSoft's almost 13,000 customers and $2 billion in annual revenue.

Philip Fersht, Vice President of Research and Consulting at The Yankee Group, told BetaNews the short-term implications of the deal were good, but remained wary of the eventual transition of PeopleSoft customers over to Oracle's platform. "The healthy fee paid to PSFT stakeholders indicates that Mr. Ellison will continue to support the customers, and will not want negative feedback, especially in the next 12 months," Fersht said.

Fersht added, "The longer term issues surround Oracle's ability to encourage PSFT users to standardize on the Oracle platform, as opposed to IBM's WebSphere platform. Oracle need to allay users' fears by optimizing the product both for IBM and Oracle software, or risk losing out to competition, such as SAP or Microsoft."

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AaronDobbins
Dec 13, 2004 - 9:23 PM edited

Let me just say that this is the model of American capitalism, and congratulations to Mr. Ellison for buying his way into a market they could not crack with an inferior product.

In all fairness, I will say that I heard for the first time today that the Oracle Financials product is fairly decent, and some shops have used Oracle financials with PeopleSoft HRMS (their bread & butter product). I will keep my fingers crossed as a PeopleSoft developer that things will work out....

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