VARs Remain Loyal To PeopleSoftVARs Remain Loyal To PeopleSoft

Since Oracle launched its $7.7 billion hostile takeover bid of PeopleSoft last year, a cloud has hung over the company and its future. Recently, that cloud darkened when PeopleSoft released second-quarter earnings that missed a prior forecast of 20 cents to 22 cents per share by roughly 7 cents and sent shares down almost 15 percent after the announcement.

Despite that, many in the solution-provider community still view PeopleSoft as a great play, especially after its JD Edwards acquisition. "We are very much behind them," says Julie Sokley, vice president of marketing and strategic alliances for Dallas-based Hitachi Consulting, a PeopleSoft gold services partner with $137.5 million in annual sales. "We are actually hiring in PeopleSoft."

Sokley tells VARBusiness that Hitachi Consulting customers are staying with PeopleSoft. "We're invested in this system," she says, adding that they're telling her company they plan on implementing additional modules or putting in more decision-making power and/or business intelligence on top of what they have.

Hitachi Consulting also is aligned with Oracle, so it won't be freaking out too much if the hostile bid goes through. Still, its PeopleSoft business, which represents approximately 20 percent of the company's total revenue, Sokley says, is growing.

Similarly, Perfect Commerce, a Kansas City, Mo.-based VAR with roughly $20 million in annual sales, says it is seeing increased momentum with PeopleSoft, especially with the prospect of JD Edwards customers' entering the fold, according to Ian Sullivan, vice president of product strategy and business development. "They have good products, and we have a healthy set of customers," he says. "We have not wavered at all."

Approximately 5 percent of Perfect Commerce's annual sales are derived from PeopleSoft products, Sullivan adds. If Oracle were to acquire PeopleSoft, he says he believes it wouldn't affect the solution provider or its customers. "Our customers will not go away, regardless of any consolidation," Sullivan says. "Besides, I think the likelihood of a deal happening is very low."

It's important to note that many solution providers work with both PeopleSoft and Oracle, including Hitachi and BearingPoint, so a sale would presumably have little effect. But consider Axion Solutions, an Irvine, Calif.-based VAR just shy of $10 million in annual sales. According to Paula Milano, co-founder of the company, 90 percent of the company's revenue is derived from PeopleSoft products; turns out it was the recipient of a "Dear John" letter from Oracle a few years back when it was abandoned as a partner. "This has been a very emotional thing," Milano acknowledges. "We're not looking forward to it if [the purchase] ever goes through," the chances of which, she thinks, have increased recently as PeopleSoft's stock price declines. What if Oracle is allowed to proceed? "I think PeopleSoft VARs will be in turmoil," she says. Oracle says it would support PeopleSoft products for 10 years, but would curtail research and development, she adds.

For its part, Axion says it's still booking PeopleSoft business, although, Milano concedes, there are some situations in which the company is not even brought to the table. If the deal went down, she says, Axion would beef up its consulting practice. Will it go down? "We don't perceive it will happen based on what the government is doing," she says. "We base our business on it."