Peoplesoft Partners Shocked, Thrilled

Company founder and former CEO Dave Duffield is now back aboard full time, replacing the ousted former CEO Craig Conway.

Solution providers, while shocked at Conway's unexpected departure, were largely thrilled that Duffield is back full throttle. The company's move comes just a week after PeopleSoft's annual customer conference and within weeks of a federal court judge's decision to let Oracle's hostile $7.7 billion tender offer for PeopleSoft proceed over the U.S. Department of Justice's antitrust objections. On Friday morning, the Justice Department said it has no plans to appeal that ruling.

For 15 months, Conway had led PeopleSoft's fight to steer clear of Oracle and its CEO, Larry Ellison. That battle quickly degenerated into what appeared to be a family feud. Conway had worked at Oracle for Ellison before joining PeopleSoft in May 1999 as president and COO. He was promoted to CEO four months later. There was even a tongue-in-cheek public discussion over whether Ellison wanted to shoot Conway's dog.

Partners said despite the unsettling end to his PeopleSoft tenure, Conway professionalized a company that, up until then, was known for its Friday morning bagels and welcoming employees' dogs in the office. "Duffield's a lovable guy, maybe too lovable, because he couldn't say no. He brought in Craig to be the hammer," said one PeopleSoft integrator who requested anonymity.

"Conway made PeopleSoft a business, [and] I can't fault him for that," agreed Chris Rapp, executive vice president of Apex IT, a Minneapolis-based PeopleSoft partner. "Dave is a positive, in our opinion, no matter what else is going on," said Dan Maude, president of Beacon Application Services, a Framingham, Mass., PeopleSoft partner. Duffield's ability to rally PeopleSoft's technical and sales teams internally should help partners focus on selling PeopleSoft 8.8, he said.

Tom Garvin, executive vice president of emerging technologies at CherryRoad Technologies, a Parsippany, N.J., PeopleSoft partner, said Duffield's re-emergence is a good move for the company regardless of how it impacts the Oracle bid. Increasingly, partners have sensed that Conway was too emotionally committed to the merger battle to be objective, he said. If the vendor chooses to engage in discussions with Oracle or another suitor, Duffield is the type of "inclusive" manager who can sit at the table and "bring a lot of people into the process," he added.

For Duffield, PeopleSoft has been a labor of love, observers said. This year, he will take a salary of $1 and no additional equity, according to board member A. George Battle, speaking on a conference call Friday morning.

As previously reported by CRN , PeopleSoft named CFO David Parker and Phil Wilmington as co-presidents. It also elevated director Aneel Bhusri to the post of vice chairman of the board.

Battles said Conway's departure was sparked by the board's "lack of confidence" that he could continue leading the company. He would not elaborate other than to say there was "no smoking gun, no accounting irregularities, he was not terminated under the for-cause clause."

The lack of detail sparked a firestorm of conjecture. Some partners wondered if Conway had gone "off the reservation" courting a white knight such as IBM or Microsoft to thwart Oracle's bid. PeopleSoft announced yet another alliance with IBM last week.

Others said he may have fallen on his sword, realizing that his presence prevented PeopleSoft from seriously considering Oracle's bid when it truly had to. Conversely, one partner said Conway may have felt that as long as he remained at PeopleSoft, Ellison would not back off. Such theorizing shows just how personal the fight had become between Ellison and Conway.

The irony, according to an anonymous integrator, is that Conway is in many ways an Ellison clone. "Conway is not like Duffield. He's not approachable; many people didn't like him. Craig and Larry are so much alike, they have the same approach and neither one likes to be around someone like himself. Maybe Craig took himself out of the mix because he'd become such a focal point that nothing could happen while he's there."

The only sure thing here is "no one really knows," he added.

HEATHER CLANCY contributed to this story.