It just occurred to me that PeopleSoft may have given one last gift to its customers by throwing in the towel to Oracle before
the Delaware court could rule on the legality of its Customer Assurance Program.
Christine Hurt, law professor at Marquette, notes
that Oracle and PeopleSoft came to an agreement just days before a judge in Delaware was to rule on PeopleSoft's poison pill defense. Hurt puts together some hints that the judge may have been inclined to rule against PeopleSoft's poison pill. She's disappointed that we won't have a chance to find out if poison pills might be in trouble more generally.
But from a customer perspective, the more interesting angle is, how was the judge going to rule concerning PeopleSoft's Customer Assurance Program? Customers aren't so much interested in the poison pill per se; but they would have been very interested in preserving the Customer Assurance Program, which promised huge rebates to recent customers if Oracle reduced support for PeopleSoft products.
I'm speculating here that perhaps PeopleSoft felt that the judge was going to rule against PeopleSoft's Customer Assurance program. It's pretty clear now that PeopleSoft realized that an Oracle takeover was inevitable and that the only question was price. If so, PeopleSoft would naturally have been motivated to throw in the towel before
the judge ruled rather than after, thereby increasing its negotiating leverage and also ensuring that its Customer Assurance Program remained intact.
Whether it was intended or not, the Customer Assurance program remaining in place is a gift to all PeopleSoft customers. The reason is that it raises the cost to Oracle of reducing support for PeopleSoft products. Oracle has already announced that it is going to develop one or two more versions of PeopleSoft and JDE products, after which it will migrate all of its products to a new unified product line. The presence of the Customer Assurance Program, however, just ensures that down the road Oracle won't short change PeopleSoft customers in the process.
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