PeopleSoft CEO Conway Says Fighting Oracle Has Cost Millions

Just weeks before the one-year anniversary of Oracle's hostile takeover bid for his company, PeopleSoft President and CEO Craig Conway said Tuesday at a press conference during PeopleSoft's 2004 Leadership Summit conference in Las Vegas that PeopleSoft has spent "between $12 and $15 million" per quarter defending itself against its rival's overtures. The revelation took some analysts by surprise. Liz Roche, MetaGroup vice president of technology research services, says that it wasn't merely the figure that Conway claimed was spent that was unexpected, but that Conway cited a figure at all. "PeopleSoft has never been accused of being overly aggressive in marketing," Roche says, adding that she was "more surprised that he discussed it in terms of having reallocated funds from the marketing budget. I would suspect not all of it came from the marketing budget, [because] I haven't seen them out there spending [at] that level on marketing." In an earlier presentation at the conference Conway told an audience of 2,500 customers and prospects that what he called the Oracle saga had a daily impact on no more than a handful of PeopleSoft's 12,000 employees. Conway repeated that claim at the press conference, saying, "That saga impacts very few people at PeopleSoft--maybe 25 people." Conway mentioned the $12 million to $15 million per quarter in spending in response to a question on PeopleSoft's apparent dearth of marketing expenditures. "We've been feeding the cost of the Oracle saga," he said, adding that the money was "taken out of our operating business plan," including the company's marketing budget. Several PeopleSoft senior executives told CRM magazine that the impact of the legal costs was essentially limited to marketing efforts. George Ahn, PeopleSoft group vice president and general manager of Enterprise CRM, says that the takeover costs have had no impact whatsoever on the development or timing of the company's Enterprise CRM 8.9 edition, announced Tuesday and due for release in June. The company, according to Ahn, stuck to its original two-year development cycle without deviation. Recounting the events of the past year to the summit attendees, Conway joked about the reaction of Oracle Chairman and CEO Larry Ellison to PeopleSoft's acquisition of former competitor J.D. Edwards: "He seemed mad." The anger, it seems, runs in both directions. PeopleSoft's countersuit against Oracle, on the grounds of unfair business practices, is scheduled to begin on November 1, according to a ruling last week by the presiding judge in California. On Friday, May 14, Oracle lowered its bid for PeopleSoft by 18 percent, to $21 per share from $26. Following the lowered bid PeopleSoft released a corporate statement that the timing of the revision marked "one more instance of what we firmly believe is Oracle's ongoing effort to damage our business." The company also said "we do not believe Oracle's bid can be completed at any price." Meanwhile, according to broadcast reports Oracle revealed a portion of its witness list for the antitrust trial, scheduled to begin June 7 in San Francisco. The company says it intends to call several software rivals as potential witnesses, including Microsoft, IBM, SAP, and Siebel Systems, as well as some of its customers, including Emerson Electric and Bank of America. See Related Story: Oracle Lowers its Offer for Rival PeopleSoft