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PeopleSoft battle - JD Edwards comes out fighting
Free software is not free, warns confident CEO

By Ron Coates

Published: Monday 09 June 2003

Bob Dutkowsky, chairman and CEO of JD Edwards, pulled no punches today as he laid into Larry Ellison and Oracle and their move for PeopleSoft, the company that has itself bid for JD Edwards.

Speaking at the company's user conference in Denver, he quietly pointed out that Oracle will close down PeopleSoft.

"Oracle is just eliminating competition and products. This will reduce customer support and choice and leave many in a difficult position. It is exactly this sort of situation that the anti-trust laws are designed to prevent," he said.

Asked how he expects PeopleSoft customers and shareholders to react he reiterated his point that the merger with his company will create value for shareholders and added: "Larry [Ellison] has already described how he is going to treat the customers. We have 29 years of established relationships with our customers."

Referring to Oracle's offer of free 11i software to PeopleSoft customers, Dutkowsky said: "Free software is not free. The software amounts to about 5 per cent of the real cost. There's the implementation, the customisation and the training of thousands – free is not free."

To Dutkowsky, the digs at Oracle were only an enjoyable sideline to his main theme: the logic of the PeopleSoft merger. He pointed out both companies have cash and no debt, answering claims that it would be a merger of the wounded.

And he was emphatic that the merger was part of a strategic plan put together over eight months. "JD Edwards was never for sale," he said. "There was no 'for sale' sign. We looked at the options of making acquisitions, investing in our product line and a merger.

"Both PeopleSoft and JD Edwards have the same mindset. In applications you think of the value that it can bring to the customer. In middleware it's a different mindset."

In the UK, Jeremy Roche, MD of Coda, is bemused. "It's an odd thing what PeopleSoft are doing. They'd moved away from being pure ERP and are a credible competitor to our corporate performance software – now they seem to be moving back."

Roche feels that the customers are being overlooked in both proposed mergers but feels that he would rather compete with Oracle than PeopleSoft. "Both seem to be motivated by a certain vanity – the desire to be second largest.

"Whether $5bn is the right price for this vanity is another question. But if Oracle does get PeopleSoft there will be a lot of well-skilled staff available – we're expanding and always on the look out."