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PeopleSoft rallies for customer support

The software maker's customer advisory board issues a letter to consumers, asking them to show their support for the company as it battles a hostile bid from Oracle.

PeopleSoft's customer advisory board has issued a call to arms, asking its customers to show their support for the company as it battles a hostile bid from Oracle.

PeopleSoft's International Customer Advisory Board, which serves as a collective voice for the company's 5,100 customers worldwide, stated in its letter to PeopleSoft users: "By far the most effective way we can show our support for PeopleSoft is to help them achieve their second-quarter goals. If your company is planning any license or service purchases before the end of June, we urge you to expedite those purchases. This will, more than any other vehicle, demonstrate customers' belief in the value of continuing to invest in PeopleSoft."

Analysts have said that Oracle's bid could freeze customers' purchasing decisions and slow PeopleSoft's revenue for the quarter.

The letter, signed by advisory board President Peg Nicholson, was sent to PeopleSoft users June 19. The letter also outlines the history of Oracle's bid and PeopleSoft's rejection of the $19.50 a share cash offer. On Tuesday, Oracle CEO Larry Ellison left the door open to raising the share price offer.

Oracle earlier this month launched its unsolicited takeover bid to acquire PeopleSoft for $5.1 billion shortly after PeopleSoft and business applications specialist J.D. Edwards announced their intentions to merge. A consolidation of PeopleSoft and J.D. Edwards would displace Oracle as the No. 2 business software maker. Ellison said that his offer will make Oracle a more profitable and competitive company.

"Oracle's expressed intention to discontinue the PeopleSoft product line is of grave concern to organizations that have chosen PeopleSoft applications to run their businesses," Nicholson said in a statement.

The letter asks PeopleSoft consumers to forward copies of the missive to others who use the software, as a means to update all of the company's customers on the advisory board's stance on the issue.

"The (advisory board) will continue to support what we believe to be the best interests of all customers in staving off this threat to our collective investments in PeopleSoft's technology and products," the letter concludes.

Oracle's response to the advisory board's letter echoed earlier claims by the company that PeopleSoft executives have resorted to scare tactics.

"PeopleSoft management has unnecessarily alarmed its own customers in a cynical effort to distract attention from the tangible benefits of our offer," Oracle spokeswoman Jennifer Glass said in a statement. "Once PeopleSoft customers learn the facts about Oracle's public commitment to them, they will understand that our offer will substantially benefit them."

Oracle recently said it intended to support PeopleSoft's products for at least 10 years if its bid proved successful, although it plans to discontinue actively selling those products. The company has recently sought to soften initial statements by Ellison that it would fire most PeopleSoft employees and phase out its products.

Earlier on Wednesday, Oracle said it would consider buying PeopleSoft even if the proposed merger with J.D. Edwards goes through. Oracle also said more acquisitions may be in the cards as it looks to battle competitors such as SAP and Microsoft.

CNET News.com's Alorie Gilbert contributed to this report.