What should you do when the world's second largest software company barges in on your friendly merger and tries to leave you out in the cold? If you're Robert Dutkowsky, head of J.D. Edwards, you dig your heels in, slap Larry Ellison and Oracle with an industrial espionage lawsuit and vow to fight until victory. That perseverance will get tested in the days and weeks ahead. Entangled in an epic battle of wills with one of Silicon Valley's biggest egos, Dutkowsky has surely gotten more than he bargained for when he joined J.D. Edwards as president and chief executive officer last year. J.D. Edwards, based in Denver, is a staid software developer with a fairly unremarkable history. Formed in 1977, the company employs almost 5,000 people and supplies nearly 6,700 midsize manufacturers with software applications that are designed to keep their factories running smoothly. PeopleSoft's $1.7bn offer for J.D. Edwards, announced one month ago, signalled the start of a long anticipated consolidation of the business applications market. But when Oracle launched its own unexpected $5.1bn bid for PeopleSoft, the company made it clear that J.D. Edwards was uninvited to the party. Oracle has since softened its position, indicating that it would consider buying J.D. Edwards if that also meant getting PeopleSoft. As the lawsuits, countersuits, verbal sparring and antitrust investigations continued to unfold, Dutkowsky, 48, spoke with CNET News.com about Ellison, why some mergers are better than others and what lies ahead for his company. Q: Why shouldn't Oracle be able to do in the "free market" what it thinks is in its shareholders' best interest?
A: I'm a big believer in free enterprise, and any company has the right to take any step that it wants -- as long as it is within the boundaries of the laws we have in place. That is why the Hart-Scott-Rodino Act is in place, and that's why the US Department of Justice is looking so carefully at the PeopleSoft-Oracle merger. They have a responsibility to protect all the other businesses that are in the free enterprise system. That's what antitrust laws guard against. They shouldn't stop a company from taking actions that it thinks are in the best interest of its company and its shareholders, but it has to be done in a way that is fair and equitable and creates opportunity across the economy and not just centred around one company. Why will antitrust regulators block the Oracle-PeopleSoft merger, after they allowed Hewlett-Packard to acquire arch-rival Compaq in a mega-merger deal?
The HP-Compaq merger was very different from an Oracle-PeopleSoft merger. First of all, the HP-Compaq merger was not hostile. It was very much like the J.D. Edwards-PeopleSoft merger. It was well-thought-out, well-conceived and well-planned, verses a hostile takeover. Secondly, when you look at the Compaq and HP business models, they're in PCs, they're in Unix, they're in servers, they're in networking, in software, services and outsourcing. They're a conglomerate, whereas the Oracle hostile takeover of PeopleSoft is focused on applications -- just one narrow segment of the industry.