Oracle CEO Gives Pep Talk to Former PeopleSoft Customers

Oracle Corp. executives reassured former PeopleSoft Inc. customers Tuesday that the newly combined company would continue to upgrade and support PeopleSoft products beyond 2008, when Oracle said it would release a merged set of business software.

Speaking to thousands of customers gathered at Oracle’s Redwood City, Calif., headquarters or watching over the Internet, Oracle Chief Executive Larry Ellison said the larger employee base would offer better support than PeopleSoft could have alone.

Ellison said he anticipated hanging on to the vast majority of the clients who stuck with Pleasanton, Calif.-based PeopleSoft during its 19-month fight to ward off Oracle’s $10.3-billion acquisition.

“I believe PeopleSoft’s retention rate will be above 95%,” Ellison said in a question-and-answer session. “If PeopleSoft was going to lose customers, I would have thought it would have been during the period of uncertainty.”

Ellison said fewer than 1,000 people had been laid off since Friday at the two companies’ headquarters. Some 5,000, about 9% of the combined workforce, will eventually lose their jobs, but many of those employees work in other offices.

“The vast majority of the people in Pleasanton have been given job offers,” Ellison said, including more than 90% of PeopleSoft’s engineers and customer-support staff.

Ellison said accounts of cultural differences between the two companies had been exaggerated, noting that the putatively warm-and-fuzzy PeopleSoft had until recently been run by a formerly hard-charging Oracle sales executive, Craig Conway.

And he shrugged off customer concerns about the difficulty of integrating products made by Oracle, PeopleSoft and J.D. Edwards & Co., which PeopleSoft acquired in 2003.

“In terms of organizational integration, we’re done,” Ellison said.

But some customers openly laughed at a claim that the corporate cultures were similar, and industry analyst Albert Pang of research firm IDC said the 95% customer retention goal was “very, very aggressive.”

“If they could keep 60% and maintain them for three to five years, that would be a major victory,” Pang said.

Analysts also said Oracle would have to support new systems underlying its software, ranging from Microsoft Corp. databases to IBM Corp. mainframes.

“They seem to be at least starting off on the right foot with customers,” said Piper Jaffray & Co. analyst Tad Piper. “But it’s hyperbole to say the integration is complete. That’s wishful thinking.”

Oracle shares rose 15 cents to $13.78 on Nasdaq.