Oracle vows 'oversupport' for PeopleSoft customers

Business software maker promises to do everything it can to keep PeopleSoft's giant customer base.

SAN FRANCISCO--Business software maker Oracle on Tuesday promised to do everything it can to keep PeopleSoft's giant customer base, whose departure could threaten the financial success of its proposed $9.2 billion takeover of PeopleSoft.

Oracle Co-President Safra Catz said Oracle would "oversupport" PeopleSoft's existing 12,750 customers to help keep their business if a merger is clinched.

"Our No. 1 goal is to maintain the customer base," Catz told a packed hall at Oracle's annual customer conference OpenWorld in San Francisco. PeopleSoft's large customer base was a primary driver behind Oracle's takeover proposal.

Oracle is concerned PeopleSoft customers might abandon maintenance contracts that could help Oracle spend more on producing new software products to better compete with Germany's SAP AG, the world's biggest business software maker.

"We need to spend as much as SAP (on research and development)...A larger customer base is the only way to do it," said Catz, who has spearheaded Oracle's takeover efforts of PeopleSoft.

AMR Research said in November that several PeopleSoft customers it surveyed said they had low expectations of new software enhancements from Oracle after a merger and were willing to move to another company for maintenance support.

AMR based its findings on a survey of about 150 PeopleSoft customers.

Oracle has pledged to support PeopleSoft products for 10 years, though Catz noted the clock on its commitment started ticking when Oracle originally launched its takeover proposal 18 months ago in June 2003. Oracle would support PeopleSoft's products until 2013, she said.

Catz said Oracle would also try to maintain "as many (PeopleSoft employees) as we can," especially software developers.

PeopleSoft, whose management has said the takeover is aimed at hurting the company's business, could see between 6,000 and 10,000 employees laid-off by a merger.

Oracle will again ask a Delaware Chancery Court judge on Monday to remove PeopleSoft's shareholder rights' plan, known as a "poison pill," which has been the last barrier to Oracle buying its California-based rival.

Story Copyright © 2004 Reuters Limited. All rights reserved.

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