Technology sector melts down

One of the many technology acronyms from the 1990s that we never see any more is JBOPS, a shorthand reference to what at the time were the five dominant players in the enterprise software market: J.D. Edwards & Co., Baan, Oracle Corp., PeopleSoft Inc. and SAP. The tech landscape will soon look much different, once it's settled which companies will be acquired and which will be doing the acquiring.

In early June, PeopleSoft announced it planned to acquire J.D. Edwards for $1.7 billion. While industry observers were still trying to digest that news, Oracle quickly derailed what looked like a relatively quick and painless acquisition process when it made a hostile takeover bid for PeopleSoft, valued at $5.1 billion.

Oracle CEO and chairman Larry Ellison originally said his company would support PeopleSoft customers, but kill the product when Oracle's newest version appeared. That led PeopleSoft's board to reject the initial offer, and for PeopleSoft's president and CEO, Craig Conway, to characterize Ellison's takeover bid as evidence of "atrociously bad behavior." Oracle later backed off a bit from its earlier claim and indicated it did indeed intend to support PeopleSoft customers while offering a smooth migration path to Oracle products.

Oracle -- which hasn't shown any interest in acquiring J.D. Edwards as part of the deal -- then upped its bid for PeopleSoft to $6.3 billion, which was again rejected by PeopleSoft's board; the shareholders, however, have yet to be heard from. Meanwhile, several antitrust suits and countersuits have already been filed.

Referring to the three-way takeover bids as a "love triangle," Bruce Richardson, an analyst with AMR Research Inc., notes, "The antitrust argument weakens when you consider that even if Oracle bought PeopleSoft and J.D. Edwards, it still would not equal SAP's market share or annual application revenue. It would be shy by several thousand customers and at least a few billion dollars."

Meanwhile, Baan had already slipped off the ERP radar screen at the end of the 20th century when it was acquired by Invensys. At the time, Baan was bleeding close to $1 million a day, and was desperately in need of a deep-pocketed white knight.

These days, however, Invensys itself is strapped for cash, so it put the Baan product line -- including the CAPS Logistics supply chain solutions -- back on the auction block, eventually selling it for at a bargain price of $135 million to an investment group that plans to combine Baan with another one-time ERP pioneer, SSA Technologies.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.