Politics & Policy

Oracle Warnings

Business horror in the making.

Maybe it’s a coincidence that the worst blackout in U.S. history occurred the same week as Hollywood released its latest horror blockbuster, Jason vs. Freddy. But the stark images of America’s (and Canada’s) major cities gone dark, people having to choose between exhaustion or sleeping on the sidewalk, and the terrifying experience of walking in darkened subway tunnels is reminiscent of that stock theme of scary movies: ordinary, everyday events turn into horror spectacles — and no one saw or heeded the warnings.

The missed signs of the blackout and, less seriously, those of the standard horror picture, serve as a cautionary tale for what could be taking place in the world of business software if the warning signs are ignored and the Oracle hostile takeover bid of PeopleSoft is greenlighted by the Justice Department.

The unwelcome move by CEO Larry Ellison’s Oracle has been well-documented. After PeopleSoft announced plans to acquire J. D. Edwards (which Justice went on to approve after just one round of review) Oracle tried to bully its way onto the scene. The Justice Department has, wisely, demanded more information on Oracle’s plan and is subjecting it to a second round of scrutiny. There is no indication of when Justice will make a final decision but it is known that regulators have begun contacting PeopleSoft customers to get their opinion of the takeover. Canadian and EU regulators are also taking a hard look at Ellison’s bid.

Meanwhile, PeopleSoft — whose compatibility with J.D. Edwards’ product and market was plainly evident — is now in a battle to keep Oracle from swallowing it whole. Acting more like Freddy Kreuger than a paragon of common-sense corporate management, it appears that the goal of Oracle to remove completely PeopleSoft’s products from the marketplace, forcing customers to accept fewer choices and higher costs.

The latest battleground is the courts. PeopleSoft has had to amend complaints it filed in a California court. PeopleSoft says it has “extensive new facts” that show Ellison and Oracle interfered with PeopleSoft’s customers and misled them by indicating Oracle would keep PeopleSoft’s products on the market if regulators allowed the hostile move. The amended filings accuse Oracle of “ongoing unfair trade practices, including its (Oracle’s) efforts to disrupt PeopleSoft’s customer relationships,” according to published reports.

The warning signs are there for all to see. Oracle is trying to drive away competition, to get PeopleSoft’s products off the market, software that many states, cities, school systems, and private businesses rely on and, furthermore, like to operate. In fact, many research firms have been advising clients to steer clear of purchasing enterprise software — just the advice firms need to hear as our economy is heading out of recession.

Oracle’s scheme is to force all these businesses, government agencies, and educational institutions to spend countless dollars replacing the PeopleSoft software with Oracle’s. This doesn’t enhance productivity or improve the economy. If Oracle cannot beat PeopleSoft’s product with superior software it shouldn’t be allowed to destroy PeopleSoft.

Like the victims of the blackout, PeopleSoft customers will be minding their own business when suddenly the lights will go out for them as their software becomes unusable, its replacement costly to implement, and its function less reliable and friendly than the software they were bullied into discontinuing. Let’s hope that the warning signs, this time, are not ignored by the Justice Department, the courts and the software community, and that they work together to get Oracle out of there. The power outage only lasted a day. It won’t end so quickly if Oracle succeeds.

Horace Cooper writes a regular political analysis column for United Press International and GOPUSA.com.


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