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Oracle vs. PeopleSoft

Oracle vs. PeopleSoft. David Fox James Hill Matt Tschabold. Overview. Oracle PeopleSoft Why The Take Over? What is ERP? The Takeover Major Players Recap. Founded in 1977 Founded by Larry Ellison Roughly 55,000 Employees Services provided include: Database Software

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Oracle vs. PeopleSoft

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  1. Oracle vs. PeopleSoft David Fox James HillMatt Tschabold

  2. Overview • Oracle • PeopleSoft • Why The Take Over? • What is ERP? • The Takeover • Major Players • Recap

  3. Founded in 1977 • Founded by Larry Ellison • Roughly 55,000 Employees • Services provided include: • Database Software • Security • Data Warehousing • Enterprise Management Software • Consulting • RFID’s, Radio Frequency Identification • and more…

  4. Founded in 1987 • Founded by Dave Duffield & Ken Morris • Primary Focus on ERP Software • One Week before the start of the Oracle hostile take over PeopleSoft offered a bid to take over J.D. Edwards for $1.7 billion, which would have made PeopleSoft the second largest ERP software company

  5. Why? • To begin Oracle was in a database market with stiff competition and profit margins becoming slim and markets becoming stale • Oracle needed to expand into a newer market which would help it regain their success • ERP, Enterprise Resource Planning, was seen as one of the waves of the future and an attractive market to enter • To pursue ERP software there were two options; development or acquisition • Oracle chose to acquire a company and found only two options; PeopleSoft and SAP • A restructuring led to an attempt at an ERP induced takeover with PeopleSoft rather than SAP due to the total cost and feasibility

  6. Enterprise Resource Planning, ERP • What is ERP? • Management Information Systems integrating and automating business practices associated with the operations or production and distribution aspects of a company engaged in manufacturing products or services. • ERP incorporates: • Manufacturing, Logistics, Distribution, Inventory, Shipping, Invoicing, Accounting. • By bringing in an ERP consultant each firms receives a unique ERP system which integrates all of the functions above though a highly complex software system.

  7. Enterprise Resource Planning, ERP • Why ERP? • Advantages: • With out a system in place, software applications may not be able to communicate in an effective interface. • It can change how a product is made either more efficiently of effectively. • Computer securities included with each ERP system to prevent internal and external theft and data tampering. • Front office and back end operations can be integrated using an ERP model. • Disadvantages: • Inadequate levels of investment and ongoing training for the personnel involved. • There are limitations to ERP programs. • Success depends on skills of the workforce, personnel turnover, expensive to install, ERP vendors charge annual license fees, tech support issues, ERP’s are sometimes seen as too rigid and difficult to use, can suffer from “weakest link” problem, high switching costs.

  8. An Overview of the Hostile Takeover • June 6th 2003: Oracle begins with by ambushing PeopleSoft with a hostile takeover bid of $5.1 billion • Bid takes place days after PeopleSoft agreed to a $1.7 billion dollar deal with JD Edwards • To resist the take over bid and bids in the future PeopleSoft pursued many options • reassurance to the shareholders of both higher profitability and reliability without a merger • poison pills spread throughout the attempt • better severance packages for staff • Anti trust lawsuits on competitiveness • July 18th 2003: PeopleSoft completes its merge with JD Edwards

  9. An Overview of the Hostile Takeover continued... • Oracle takes suit against PeopleSoft in the first of many court battles to get poison pills removed • In February and March of 2004 both the DOJ & European Commission agree that the deal was anti competitive further halting the attempted acquisition • Microsoft announces serious consideration into an acquisition of SAP • This announcement works in favor of Oracle claiming that due to stronger competition the merger will not be anti competitive • As a result of this information and a long court battle, Oracle is victorious in their claims of having the merger not being anti-competitive

  10. An Overview of the Hostile Takeover continued... • After the lawsuit on anti competitiveness was resolved Oracle once again bids on PeopleSoft • Severance packages are increased as a result • PeopleSoft fires Conway due to lack of faith in his leadership ability • Claims on the true worth of PeopleSoft by the founder of PeopleSoft circulated • Once again the courts intervene to gauge what the true worth of the company is • In the court cases Oracle promises to support PeopleSoft customers until 2013 • As a result of these actions Oracle brokers a deal to close out the acquisition at $10.3 billion

  11. Major Players • SAP • Oracle Applications • Microsoft Dynamics (Formerly Microsoft Business Division) • The Sage Group • SSA Global Technologies • Lawson Software • Visma • Industrial and Financial Systems • Exact Software • QAD • Epicor • NetSuite • SIV.AG • 24SevenOffice

  12. Recap • Oracle • PeopleSoft • Taken Over Prompted by Oracle’s Desire to Have ERP • ERP is Designed to Improve Productivity • The Takeover • Major Players

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