Boardroom Despatches: Tell me something good about Oracle/PeopleSoft/JD Edwards

Are the proposed mergers in the applications software business all negative in nature? They may have hogged the headlines over the past week but Rene Carayol argues customers need a lot more than vendors trying to take each other out.

I can't help but feel the software industry, and in particular the applications software industry, has been left slightly tarnished by the events of the past week. Sure, the whole Oracle-PeopleSoft-JD Edwards saga makes for interesting reading but it's a soap opera we could do without.

That's not to say we shouldn't expect - or want - consolidation. PeopleSoft is a company I know really well and CEO Craig Conway - an ex-Oracle man - has transformed them. He's made them into a successful 'internet-everything' business. But no one, perhaps apart from market-leader SAP (more on them in a minute), has really taken the market by storm.

The backdrop to all this is Microsoft. In the enterprise resource planning (ERP) space Microsoft is still a minnow, with less than two per cent market share. Yet all the others are trembling.

So you would think that before now, or at least before last Monday when PeopleSoft and JD Edwards announced their marriage, someone would have been brave enough to kick off consolidation. But no one has been.

But once one boss (or two, if you include Dutkowsky at JD Edwards) gets brave, trust Larry Ellison to show more bravado. Cue last Friday's spoiling bid for PeopleSoft from Oracle and the subsequent slanging match.

The PeopleSoft-JD Edwards deal certainly made some sense for the latter. It was an easy way out after a couple of reasonable decades.

I couldn't exactly see where PeopleSoft was going with it. Was it merely buying customers? Tell me there was more to it than that.

But then I see Oracle's move and I think 'spoiling tactics', a case of taking out the enemy, as can be seen by Oracle's lack of plans for PeopleSoft products and the proposed speed of the takeover timetable.

In short, JD Edwards, PeopleSoft and Oracle are all completely different organisations - and right now they're all in the middle of big, unsafe bets.

Cast your mind back to my column last month and my meeting with Indian entrepreneur and Wipro chairman Azim Premji. His company has acquired many others over the past couple of decades of rapid growth and they have served Wipro well - it has learnt from them and been patient where necessary.

The developments from the US seem simply to be about getting rid of a competitor. Even if that weren't the case, consider this nugget: 90 per cent of 1990s mergers failed to deliver on their stated objectives.

With my CIO's hat back on, I have to ask what is in all this for the customer? My answer - sod all.

How can a bigger, more aggressive, more unwieldy supplier help my business? One way or another a deal will remove choice, concentrate power and make the vendor more distant.

I would like to challenge silicon.com readers to come up with the benefits of these deals to them. Are you happy with developments? Let us know by emailing editorial@silicon.com.

My theory on all the manoeuvring is that these companies are losing market share to bespoke software out of places like India. There's a silent drain of business to companies who we may never have heard of, companies practising better, faster, cheaper.

At least German giant SAP is showing it is smart and adaptable in terms of opening up its huge systems.

As users, we want off-the-shelf - but we don't want commoditised software. That's the dilemma for vendors.

And the other lesson for them? People like Ellison, Conway and Siebel, who are all out of the Oracle stable, all shout too early and too loud about what they're going to do in a market.

In that respect, Gates and the Indian entrepreneurs have the upper hand.

Rene Carayol is a former IT director and board member of IPC Media. He is now the CEO of consultancy Voodoo and co-author of the best-selling Corporate Voodoo and My Voodoo. He can be contacted at rene@carayol.com.