Why is scale so important all of the sudden? Why is consolidation suddenly sweeping through this market?
The enterprise software market is becoming saturated. Customers that want an enterprise software suite probably already have one -- in particular at the high end, where Oracle, PeopleSoft and SAP play. In the mid-market, there still remains opportunity, and the penetration of software is not as great as in the enterprise space. But the opportunity is getting smaller, and at the same time, there is an excess of software capacity in the market. There are 700 players. That's too many vendors trying to sell software. If Oracle is ultimately successful in acquiring PeopleSoft without you in the deal, what's your next step? To find a new buyer, perhaps IBM or Sybase?
I would think, because of the strength of J.D. Edwards, that there are probably a number of companies around the globe that would see acquiring J.D. Edwards as a positive. It doesn't help me to speculate who might be interested. J.D. Edwards has never been for sale; there was never a for-sale sign on this company. We strategically decided to pursue a merger with PeopleSoft. And that was the only strategic step we wanted to take; that is, in terms of going out in the market and combining ourselves with another company. We want to merge with PeopleSoft, because we believe it's in the best interest of our stakeholders to do so. If someone were to ring us up and ask if we're for sale, the answer is: "No". Were there any other companies that you were strategically looking at as potential merger candidates?
Many were companies that J.D. Edwards would go out and acquire -- not bigger than us. If the goal was to get global-scale, we could either merge with a bigger partner or bring together several players in the industry to create a bigger J.D. Edwards. There were lots of strategic alternatives that we looked at. The one we picked and the only one we aggressively pursued was PeopleSoft. If Oracle is able to merge with PeopleSoft without J.D. Edwards, are you concerned that the combined company will form a stronger focus on the mid-market, your core market? One of the misconceptions that exist in the industry is that Oracle, PeopleSoft and SAP haven't attempted to get into the mid-market until now. That there's been some kind of awakening that the mid-market is a great place to be. PeopleSoft, Oracle and SAP are in the mid-market today, but their products and solutions are too complex to do what the mid-market set of customers really demand. SAP has been in the mid-market for as long as we have been in the business. But their products are built for the global 1,000. How much time have you been able to spend on the integration plan before the deal closes?
We have more than our fair share of our energy targeted toward integration, while the rest of our energy is targeted toward running the business and serving our customers. We have people working on virtually all facets of the integration, so that when the merger with PeopleSoft closes, we'll be ready to go as quick as we can. PeopleSoft has a very difficult challenge. They have to run their business; they have to think about the integration plan and they have to fend off Oracle's hostile bid. They have an even more difficult challenge then we do.