Feld Comment: I think the IBM relationship is more important than ever to PeopleSoft and likely unaffected by Conway’s departure. It’s such a large partnership that it had to have had major visibility at the board level. In addition, the NY Times has a good article on this today that asserts there is a special board committee for all Oracle M&A discussion and that Conway, Duffield, and Bhusri are not on it (therefore asserting that all comments that Conway made about the deal are board directed.) There’s also a subtext that the two major factors that caused Conway to get the boot were (a) failure of the JD Edwards acquisition and (b) lack of clear long term technology strategy (which the IBM relationship enhances / helps impact in a positive way.)

However, I will say that IBM would do well to proceed very cautiously with regard to any consideration of acquiring PSFT given that they derive a huge amount of revenues from their SAP relationship, which for all practical purposes would evaporate the minute they announced such an acquisition. The MSFT-SAP combo was briefly explored but the regulatory hurdles to make such a deal happen are simply enormous and it’s not likely that the companies would combine well. I would be surprised if Oracle didn’t acquire Siebel, it’s a good fit from many perspectives and Oracle needs the CRM apps bad.

Finally, with regard to SAP there is very little that can be gained by merging at this point. We’re already taking a big % of business away from the other players, the tea leaves favor us staying right where we are while the other companies flail around… we really do look like the adults in the industry. It’s really hard to make the case that an ORCL/PSFT combo would be competitive to SAP simply because we already beat both of those vendors even when they are discounting up to 90%, in essence giving away their products for the maintenance and services revenue. Oracle needs PSFT, but only because it stems their slide from #2 to #3 in the market, it doesn’t help them beat SAP.

Feld’s Comments: Good comments Jeff – thx. I continue to be amazed (in a good way) at how SAP just outplays, outmaneuvers, and outperforms Oracle and PeopleSoft. It’s been SAP’s to lose a few times and each time they’ve come out even stronger. You’re affiliated with a great company.