PeopleSoft`s recent deal with the University of Cape Town included the controversial money-back clause that has been widely criticised as a poison pill designed to defend itself against a hostile takeover bid.
However, the company says its customer protection programme is in fact aimed at minimising a potential loss of business during the hostile takeover attempt by rival Oracle.
PeopleSoft came under attack from Oracle as well as several analysts after the announcement of the programme was seen as an offer to refund customers two to five times their money back if PeopleSoft were acquired and its products terminated.
Analysts have described the offer as a "poison pill" since the acquiring company rather than PeopleSoft would have to foot the bill.
Critics have also pointed out that PeopleSoft CFO Kevin Parker has said that half of all licences signed in the past quarter included the insurance clause, which would mean that Oracle, if its takeover bid succeeds, would have to pay the new customers $460 million to $1.8 billion.
In a recent filing with the US`s Securities Exchange Commission, PeopleSoft says the customer protection programme is aimed at minimising a potential loss of business during the Oracle offer.
"In connection with its unsolicited tender offer to PeopleSoft stockholders, Oracle has made explicit, well-publicised statements of its intentions with respect to PeopleSoft`s products if its acquisition efforts succeed," it says.
According to the filing, Oracle`s statements had caused existing and potential customers to express concern over the long-term availability and support of PeopleSoft products.
Errol van der Merwe of activ8, the local PeopleSoft distributor, says the programme has also been implemented in SA.
Activ8 recently announced that the University of Cape Town had licensed PeopleSoft`s Student Administration solution for its 18 000 students, becoming the second local university in as many months to license higher education solutions from activ8.
Van der Merwe says the customer protection programme applied to that deal.
Asked if the programme has helped business in SA, Van der Merwe says: "It must be a factor."
However, he says what has proved more important in SA is the fact that customers have been given access to senior executives at PeopleSoft, who have taken the time to explain their perspectives.
Oracle`s bid to take over PeopleSoft, which was initially set to expire at midnight yesterday, has been extended by two weeks to 18 July. However, Oracle has not increased its offer to buy PeopleSoft`s shares at $19.50 a share.
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