When Internet-based companies, especially ones the size of Oracle and PeopleSoft, announce fundamental changes, responses are usually swift.
With the explosion of online news sources like Google and Yahoo news, as well as the blogosphere, reactions to major events spread like wildfire. The following are excerpts from various news outlets concerning the anything-but-smooth merger.
Carolyn Said of The San Francisco Chronicle had some speculation about Oracle CEO Larry Ellis’ next move:
“the reality is that Ellison, despite his flamboyant reputation, is likely to settle down for the nuts-and-bolts business of merging Oracle Corp. and PeopleSoft Inc. before spinning off on his next grand venture, observers said.”
The Inquirer’s Fran Howarth offered some insight into why Oracle pursued this avenue to begin with:
“Oracle has always stated that it needed to acquire rival PeopleSoft in order for it to be able to compete effectively with rivals Microsoft and SAP, and this is a point with which the EU authorities concurred. According to a recent conference call in which Larry Ellison, CEO of Oracle, spoke, reductions are to be made in R&D expenditure of the combined company in the region of $150m to $200m – although Ellison has said that Oracle will invest in applications development and customer support.”
The ripple effect of such a merger is something else that should be kept an eye on as well. This merger could lead to others much like Google’s IPO convinced other Internet companies to attempt this route. In The Mercury News, Therese Poletti expanded on this thinking:
“Albert Pang, an analyst at market research firm IDC, said the number of software mergers could double next year, up from 30 deals in 2004. He cited accounting and business software developer Sage in the United Kingdom and personal-finance software maker Intuit in Mountain View as potential merger candidates. We are entering the thick of software consolidation right now,’ Pang said.”
USAToday also offered insight into the “why such a merger took place” aspect of the situation:
“Sure, there is a little bit of redemption, but this merger makes us that much stronger,” Ellison said. “It makes Oracle a stronger competitor against SAP, Microsoft and IBM. It’s not, Gee, we won a hostile takeover.'” Acquiring PeopleSoft might be the easy part, software analysts say. Oracle faces a tall task melding two large organizations while competing with the likes of giant SAP of Germany and IBM.”
With every merger of this size, there are will be inevitable loses. In this case, it very well could be people who have been employed with PeopleSoft. In the Denver Post, Aldo Svaldi took an interesting look at how the merger could lead to some workforce casualties:
“how fast and how deep those cuts will affect the approximately 2,000 PeopleSoft workers in Denver following the $10.3 billion merger isn’t known. I am afraid it does not bode well for PeopleSoft’s Denver employees,’ said Ben Snow, business development manager for the Southeast Business Partnership. We have to wait and see.'”
Chris Richardson is a search engine writer and editor for Murdok. Visit Murdok for the latest search news.
