White knight for PeopleSoft 'unlikely`

By Iain Scott for Gartner

Johannesburg, 11 Jul 2003

The emergence of a "white knight" to provide an alternative to Oracle`s bid to buy PeopleSoft is unlikely and applications users should evaluate if and how their providers will support them, says research firm Gartner.

The group says that while the outcome of Oracle`s bid for PeopleSoft remains uncertain, some companies are looking to see if another vendor may step in as a "white knight". However, other vendors in the infrastructure and application markets are unlikely candidates.

Gartner points out that its research notes on the subject are not meant to imply that a white knight is needed, but rather to consider the scenarios for vendors such as Microsoft, IBM and Hewlett-Packard if they were to counteroffer for PeopleSoft.

"After examining the opportunities for these other vendors, we believe PeopleSoft and JD Edwards prospects and users should consider a `white knight` scenario as a low probability when considering their options," says Betsy Burton, Gartner VP and research director.

"However, most vendors` strategies will be impacted by this pivotal event in the next two years. Applications users should accordingly evaluate if and how, in light of this event, their current providers will support them."

Gartner analysts say companies cannot sit on the sidelines and wait for the decision on these acquisition activities, as they need to evaluate the best course of action regardless of the merger outcome.

"While uncertainty lingers, Gartner has been advising clients to not simply stop all PeopleSoft and JD Edwards deployment activities," says Burton. "Assess your risk tolerance, coupled with your assessment of the likelihood that Oracle will complete the PeopleSoft acquisition. Once understood, if appropriate, take specific action based on where you are in the application lifecycle."