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Kevin Reschenberg
has over 20 years of experience in IT and holds an MS in
computer science. A former senior consultant and
process specialist with PeopleSoft Inc., he now works
with PeopleSoft customers as owner of Orange County,
California-based SparkPath Technologies, Inc. |
What's
Going On at PeopleSoft?
Friday morning, while waiting in the dentist's reception
area, I was subjected to the elevator music version of
Prince's "Purple Rain". Surpassing even that horror,
though, was the surprise of the news from
PeopleSoft--that Craig Conway had been fired. With all
that's going on, I feel a little distracted from
technical talk...
The opinion among investors seems to be that Conway was
standing in the way of the Oracle merger and the board
became frustrated by this. And so the stock price shot
up--even past the current offer price in anticipation of
a higher offer.
But does that theory make sense? The board has
unanimously rejected the current offer and every other
one, from $16 all the way up to $26. I doubt that Conway
forced the board to vote that way, or that the board
would suddenly make an about-face and blame Conway for
holding it back.
Dave Duffield was named CEO. Whether he was dragged out
of retirement or he volunteered, who knows. Now, I'm a
huge "DAD" fan. Even when things got tough for the
company starting around 1998, many PeopleSoft employees
gave him the credit he was due for founding the company,
writing the first code, and leading it through explosive
growth.
The company hosted a conference call and denied that
Conway's firing had anything to do with the Oracle
offer. DAD then talked about being in it for the long
term and mentioned the need to work more on making
PeopleSoft a better place to work (as it was in the old
days). He reportedly referred to this three times.
So...If DAD's objective is to negotiate with Oracle and
get the merger over with, why get rid of Conway now? Was
he that much of an impediment that not even the entire
board could act? If it's really about his performance,
and the merger is almost a done deal, why would the
board care? Why would DAD say he was in it for the long
term? Why the sudden change of opinion on the
(unanimous) board, when earnings for the quarter are
predicted to be better than expected? Why would DAD talk
about making employees happy if his real plan is to sell
to Oracle quickly? I just can't see him acting like
that.
Was the board really just thanking Conway for his
service by giving him a nice severance package? No,
because apparently he had already been given a big
golden parachute that was to be triggered in the event
of an Oracle takeover. As I understand it, his severance
now is less than that. The abrupt way in which this
happened, and the way his service was being described
argue against that theory.
The only speculation I've read that might make sense is
that Conway was also creating some type of static
interfering with possible white knight offers. One other
opinion piece claimed that customers at Connect were
expressing dissatisfaction and that DAD may have decided
to step in for that reason. Again, if he does not think
PeopleSoft has a future, why bother?
It makes me think that maybe this will go on for a while
longer.
Until next time...
 Email: kevin@sparkpath.com |
