For the second day in a row, JD Edwards CEO Bob Dutkowsky was taking umbrage at Oracle`s $5.1 billion hostile bid to acquire PeopleSoft.
Separately, during a presentation to users at the Quest Global 2003 JD Edwards user conference in Denver, Colorado, and then during a press conference, he labelled Oracle`s bid and behaviour as "appalling" and "unacceptable" and said it "smacked of total disregard for customers and anti-trust laws".
He also said Oracle was "very naive about customers and dismissive of them", after it stated at the advent of its hostile bid that it would terminate development and support of PeopleSoft applications were its bid to be successful.
"It is appalling that Oracle management discards customers for financial gain," Dutkowsky said. "A merged PeopleSoft and JD Edwards would not do that." Dutkowsky stressed that JD Edwards had never been in better shape, and had met all of its commitments to customers made a year before.
"We promised more innovation than ever before, and we delivered 400 product upgrades in 12 months, effectively 12 months ahead of schedule. Our financial performance has been good: before the most recent quarter, we had enjoyed six months of profitability, and we have $400 million cash on hand and no debt. Our surveys have yielded high levels of customer satisfaction. We are among the Top 50 technology companies in terms of training investment, and staff turnover is at a seven-year low. The quality of our partnerships has improved significantly, and in conjunction with IBM we can halve time to value."
However, said Dutkowsky, as JD Edwards considered its move to the next level of customer satisfaction, it reviewed its key areas for improvement and posed key questions: more investment, sales, services, acquisitions, geographies, vertical areas, or mergers?
"Scale was the key consideration," said Dutkowsky, "and on review, we decided the best alternative for JD Edwards was to pursue a merger with PeopleSoft. In parallel, but separately, PeopleSoft had reached the same conclusion. Once we had begun the process of working together, we found they really were the perfect partner for us in terms of scale, capability and strength."
The resultant, merged entity will occupy the number two position in the enterprise application market; and generate $2.8 billion in revenues, with 11 000 customers and 13 000 employees. It will combine complementary market leaders: PeopleSoft is particularly strong in large companies, while JD Edwards is a mid-market leader.
"Our merger means, for our mutual customers, more scale, more financial strength, more industry solutions and more products: a case of 1 + 1 = 3," said Dutkowsky.
"We then had to review our cultures: could our people, cultures and leadership fit together? Again the answer was yes: we had two customer-focused cultures; mature businesses which know their markets; loyal staff who respect their customers more than anything else. We began talking with PeopleSoft around Halloween 2002, and soon came to the conclusion that this was a perfect fit."
PeopleSoft CEO Craig Conway, commenting from Paris in a videotaped interview, echoed Dutkowsky`s views: "We`ve actually been talking for several years," he said. "Key to this merger is the fact that it leads to elective rather than mandatory choices for customers."
Conway advised that the merger would lead to three product families from which customers could choose:
* The IBM AS/400, or iSeries (effectively, one of the JD Edwards ranges);
* Midmarket applications (also JD Edwards); and
* Those targeted at large enterprises (those from PeopleSoft).
Dutkowsky contrasted the two companies` joint principles of innovation, customer dedication and employee respect with Oracle`s hostile PeopleSoft bid, in terms of which it would shut down all PeopleSoft development (killing innovation) and force customers to migrate to Oracle applications.
At the subsequent press conference, Dutkowsky stressed a few key points:
* JD Edwards was "never for sale"; rather it chose to merge with PeopleSoft as a company.
* Conway would be the CEO of the merged entity.
* All key executives at JD Edwards have signed contracts to stay on for set periods of time, between six and 24 months; Dutkowsky himself will be on board for a minimum of six months.
* The companies expect no integration problems between the product ranges, methodologies and support infrastructures.
* JD Edwards has continued to win significant business, expand globally - with major investments in China - and technology breakthroughs, including a benchmark of 14 000 users on the IBM iSeries.
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