Oracle Moves to Mollify Angry PeopleSoft Customers

In a move designed to defuse the anger of rebellious PeopleSoft ( PSFT) customers, Oracle ( ORCL) CEO Larry Ellison on Friday afternoon said his company "will continue to develop and improve PeopleSoft's products for at least the next 10 years -- even longer, if customers require further support."

Although Oracle spokeswoman Jennifer Glass said the statement did not represent a change in policy, it certainly made the hostile takeover sound less threatening to existing PeopleSoft customers. And from Ellison's point of view, that's an important step in winning the increasingly bitter takeover battle.

One angry PeopleSoft customer, the state of Connecticut, has brought an antitrust action against Oracle in an attempt to block the $19.50-a-share acquisition, while others have complained loudly and publicly that they will not tolerate being pressured to move to Oracle's less-popular business applications.

When the offer was first announced, Ellison indicated that he would fire most PeopleSoft employees, halt future development of PeopleSoftproducts and help customers move to Oracle. Existing customers will be supported, he said then (and now), but new technologies would be added to future versions of Oracle products.

Today's statement contains a list of seven "commitments" the company is making to PeopleSoft customers, including a promise to "extend the support period for PeopleSoft products beyond the time frame PeopleSoft itself has committed to and into the next decade."

However, the most important point -- continued product development -- is not quite what it appears on first glance.

In an interview, Glass said development means "bug fixes" or "features enhancements" requested by customers. There won't, however, be full-blown upgrades of PeopleSoft products. Asked if there ever will be a PeopleSoft version 9, Glass said no, adding that those technologies would be added to Oracle's E-Business suite.

PeopleSoft spokesman Steve Swasey said the company wasn't impressed by the new offer: "We think he's backpedaling because customers are outraged," Swasey said. "Who would believe him?"

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