Embattled PeopleSoft Dumps CEO ConwayEmbattled PeopleSoft Dumps CEO Conway

In a surprise move, PeopleSoft has ousted Craig Conway as president and CEO.

Company founder and Chairman Dave Duffield will assume the CEO role, according to a statement released early Friday. In addition, Kevin Parker and Phil Wilmington were named co-presidents. Parker will handle internal operations and retain his title of CFO while Wilmington will head up worldwide field operations.

The decision, made by PeopleSoft's board of directors, was motivated by a "loss of confidence in Mr. Conway's ability to continue to lead the company," according to the statement.

The move may signal a significant shift in the company's 15-month fight to avoid Oracle's hostile takeover offer. Conway led the bitter battle to remain independent. A U.S. District Court Judge recently cleared the way for Oracle to proceed, ruling against the U.S. Department of Justice, which maintained an Oracle-PeopleSoft combination would hurt competition.

"The board has asked Dave to assume the leadership of PeopleSoft. We are grateful and delighted that Dave will be guiding the company with the innovative spirit and values upon which PeopleSoft was founded," according to a statement from director A. George "Skip" Battle.

Alluding to the Oracle offer, Battle said PeopleSoft's moves had come on the "unanimous recommendation" of the company's Transaction Committee, including Battle himself and independent directors Frank Fanzilli, Michael Maples, and Cyril Yansouni.

Solution providers were dumbstruck.

George DiGrandi, managing director of Premier Consulting Group, a Secaucus, N.J. PeopleSoft partner agreed. "Unbelievable! I shouldn't be surprised but when I heard, I couldn't believe it."

DiGrandi and some other PeopleSoft integrators said the fact that Duffield is stepping into a more active role may actually hinder Oracle's buyout attempt.

"Dave may have a better chance of fighting off Oracle. Nothing negative about Mr. Conway, but Duffield had a way of working with customers and employees. He was the heart and soul of the old PeopleSoft and this may be a way to bring some of that back," DiGrandi said. "I don't think PeopleSoft and Oracle ever would fit culturally and with Dave back in the lead, that cultural chasm gets wider."

Initial Wall Street reaction was positive. At one point, Peoplesoft shares were up $1.33 to $21.18.

PeopleSoft is holding a press conference later Friday to detail its moves.