RE: Oracle to buy Peoplesoft..

[Mike.Crump@xxxxxxxxxxxxxxxx]

Couple of things to consider.

                                                                            
 1.) Oracle is offering $5.1B in cash, but only has $5.5B in cash, thus     
 depleting its reserves. This is not a risk free venture for Oracle.  In    
 fact, the PeopleSoft stock price is already beyond the offer that Oracle   
 made.  I think the offer is ridiculously low with Oracle trying to create  
 a perception that PeopleSoft and J.D. Edwards are in distress.             
                                                                            
 2.) Larry Ellison said in a conference call this morning that Oracle would 
 support PeopleSoft customers, but kill the product.  So the strategy is to 
 upgrade PeopleSoft customers to the next release of Oracle, a task that    
 isn't nearly as easy or painless as Oracle is trying to make it sound. If  
 I'm SAP, I love this because it puts every PeopleSoft customer back in     
 play.  Upgrade....hmmmmm....even migrate might not be strong enough of a   
 word to describe what a large majority of customers of Peoplesoft and J.D. 
 Edwards might have to do.                                                  
                                                                            
 For example, our company would go to SAP before moving to Oracle.          
                                                                            
 3.) This is clearly a reaction to the J.D. Edwards acquisition and is an   
 effort to either kill the deal or wound PeopleSoft and hurt it             
 competitively in the short to mid-term. For example, one easy way for      
 PeopleSoft to fend off Oracle is to pay cash instead of stock for J.D.     
 Edwards.  This would take cash away from PeopleSoft, making it less        
 attractive to Oracle stockholders.                                         
                                                                            
 So, it could be a ploy in the end.                                         
                                                                            
 4.) It will be very difficult for Oracle to pull this off if PeopleSoft    
 doesn't want to do it.  This isn't like P&G buying a new brand of Shampoo  
 that it can immediately run through its channel.  There are no hard assets 
 here.                                                                      
 PeopleSoft customers are the ones hurt the most, with Oracle abruptly      
 devaluing users' investment in PeopleSoft applications because it ends     
 future enhancements to products and causes them to incur switching costs   
 in the future.  For example we have already indicated to our J.D. Edwards  
 people that this might actually force us to move to SAP.                   
                                                                            



I believe PeopleSoft is planning a statement at 12:00n EDT.