FRAMINGHAM (11/13/2003) - At Oracle Corp., Executive Vice President Chuck Phillips is a man who wears many hats: He reports directly to CEO and Chairman Larry Ellison; sits on Oracle's executive management committee; handles customer-facing activities, marketing, partner relationships and corporate strategy and business development; and he's the point man in Oracle's US$7.3 billion quest to devour rival PeopleSoft Inc. Phillips, who worked at Morgan Stanley's Institutional Securities Division for nine years -- where he became a top analyst on enterprise software companies -- took time this week to talk about the takeover attempt, new customer programs and his various roles at Oracle.
Can you comment on the latest developments with Oracle's lawsuit and the request for expedition of the review process?
No. 1, their shareholders began this process, claiming to (PeopleSoft's board), "You're transferring wealth from us to other people without our permission." It helps the customer, but makes any potential acquirer have a huge liability. It's making the company worthless and taking control from the shareholders, who can't control the company without triggering liabilities.
Whether they're right or wrong, PeopleSoft has been fairly successful countering Oracle so far, hasn't it?
The "or wrong" part is a big deal. It's a very dangerous thing for the board to be doing this, and that's why they are getting sued by shareholders, who are not going to stand for this sort of thing anymore. They are out of step with the current environment of corporate governance.
Any update on the expedition request timeline and the ongoing Department of Justice antitrust investigation?
We don't have a time yet. The process will be up to the courts. (And on the DOJ issue), from what they've been saying, they were giving us a December-to-January time frame, but nothing is written in stone.
What if the Chancery court decides against you?
We will evaluate our options. We won't pay any price for it. But we're determined to (go ahead) if there is a way to get (the price) down, and we think there are ways.
What did you think about PeopleSoft's recent numbers, which indicated record revenue?
Craig Conway also claimed you had your worse year since 1998. They have not had the benefit of having that many professional analysts dig into their numbers. If you do a comparable analysis of the combination of J.D. Edwards and PeopleSoft on a combined basis, apples to apples, it was a horrible quarter. They declined 18 percent in license revenue and have had seven consecutive double-digit declines year over year. The company is shrinking rapidly.
Look at actual (Oracle) numbers. For the past nine months for applications only, we're down 2.2 percent. So the commentary and the spin on it usually should dissolve quickly when you look at the numbers.
Why bother buying it then?
And what about the story in which Larry said he wanted to kill the products? That's how you add value. If it's not managed well, you manage it. Larry never said anything about canceling the products. Why pay this kind of money to kill the products? That's not ever been part of the plan. Instead of going to the shareholders to ask if they wanted the offer, (PeopleSoft's executives and board) went to the customers and alarmed them. We thought it was unfortunate in the midst of the offer to put the customers in panic.
What is your role at Oracle?
I handle customer-facing activities. We are initiating lots of programs for customer advocacy to reach out to them and in multiple ways make sure they know they are (the) highest priority. We've formed a new organization that reports to me. We haven't formally rolled it out yet, but we have put together people with deep experience with dealing with customers at the senior level. They have deep experience resolving customer issues. They are not on a quota and don't sell. Their only role is to make sure the customer is successful and ask them how they're doing and discover any issue and quickly make sure they have an executive sponsor.
We've taken the time to learn best practices based on what the company did before and we'll be connecting with other parts of Oracle. If we find there is issue X, we find what department has responsibility. They handle anything falling through the cracks and catch it quickly. We're still hiring in some areas and we'll launch next month.