PeopleSoft board consider controversial guarantee program

By Stuart Finlayson

PeopleSoft's board of directors has asserted that it hasn't yet decided whether to reinstate its controversial customer guarantee program with its new-improved terms, which has caused much rancour among executives at Oracle.

The statement came after Oracle asked a court in the US to expedite its request for an injunction against a PeopleSoft rebate program that kicks in if the company is acquired.

Oracle are annoyed at what they claim is an act of entrenchment on the part of the PeopleSoft executives, with PeopleSoft revising the terms of its rebate program, allowing its customers to receive refunds on purchases if PeopleSoft were acquired in the next two years, rather than one year as was previously the case, and also if the buyer reduced support for PeopleSoft products inside four years, rather than two. Additionally, it promised rebates of up to five times the purchase price of the software.

The accusation of corporate entrenchment has been levelled at PeopleSoft executives by Oracle as such terms effectively kill off any hope of Oracle acquiring PeopleSoft as the costs they would incur would prohibit such a move.

In its motion to the court in the States, Oracle admitted as much, saying, "If the PeopleSoft board is permitted to continue to issue self-serving, entrenchment-motivated contracts under the revised money-back offer, Oracle may be forced to abandon its bid, as it will no longer be economically reasonable."

The PeopleSoft executives are expected to make a decision on program sometime this week.

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