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Oracle, PeopleSoft and the Future

To paraphrase rock band REM: It's the end of the world as we know it, and we should all feel fine.

Uncertain Future

What's to feel fine about when the future of PeopleSoft's HR, financial and other enterprise applications is in question? Should the takeover proceed, PeopleSoft customers would be forced to migrate not only to Oracle apps, but also to the Oracle database and application servers that underpin them. Meantime, thousands of PeopleSoft employees would lose their jobs.

Anytime two giants clash, people and products get hurt. But over the long haul, it's better to let the hand of free enterprise mold an industry's and a company's future than to rely on government lawyers to determine what's right. Larry Ellison's intent may be to create a software juggernaut, but he also has put every enterprise-application vendor on high alert: Innovate or be pushed aside. It's no coincidence that from the time Oracle announced its $26-a-share (later reduced to $21) tender offer, PeopleSoft (for one) has paid more attention to delivering value to customers and investors.

Consider PeopleSoft's recently announced partnership with IBM to integrate its enterprise apps with IBM's middleware and development tools. Under the five-year agreement, the two companies plan to invest $1 billion in industry-specific technology, marketing and sales initiatives. The partnership is expected to give PeopleSoft customers more flexibility to modify their apps and connect them to third-party systems. One CIO who has been dissatisfied with PeopleSoft's lack of attention to the System/390 platform recently told me he's reconsidering his plans to switch application vendors based on the IBM relationship.

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