Summary

October 11, 2004 - While we concede it is unlikely, it is possible PeopleSoft users could find themselves another option if Oracle prevails in its takeover attempt. Senior PeopleSoft executives could walk out with a large portion of the development and support people - in effect, secede from the Oracle acquisition. A new company, "NewPeopleSoft" would offer support/maintenance contracts to users when their renewals came up. Ordinarily this would be entirely out of the question, but Chairman Ellison's remarks immediately after Oracle launched its takeover bid have left PeopleSoft users highly suspicious the deal will ruin their software investments. Moreover, if the 'Confederates' were led by Dave Duffield, we believe NewPeopleSoft would have sufficient credibility to attract a majority of the user base to the 'rebel' side. From a business perspective, a support-only organization would have a profitable, viable business model and could have sales in excess of $1-billion. Short of this happening, if the merger takes place we advise PeopleSoft customers to be prepared to stop all upgrades and sunset their maintenance payments if they are not satisfied with Oracle's roadmap.