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CIO Trendwatch: Oracle's overture, offshore outsourcing, oh my

Oracle's overture to PeopleSoft and the "irreversible mega-trend" of offshore outsourcing put some heat in June's headlines.

At the beginning of June, things were looking a little slow. We had summer swelter, but no helter skelter.

And then along comes Larry (Ellison), and all helter skelter breaks loose.

People who need PeopleSoft

June's biggest IT story had to be Oracle Corp.'s intention to take over PeopleSoft Inc. for $5 billion and change. The story put the "bold" in bold-type headlines. Ever since, we've been listening to harsh words, witnessing a war of press releases, and are seeing enough legal action to build new sunrooms for a host of attorneys.

Despite the fact that Oracle sweetened the pot, increasing the value of the deal to more than $6 billion, PeopleSoft's board encouraged shareholders to reject the offer, and the company has taken Larry and company to court.

Of course, the feds are looking into the legalities of the deal. The state of Connecticut has gone so far as to sue Oracle, saying its hostile takeover would hurt the state's economy and spike prices.

At least one analyst told that if Oracle purges PeopleSoft, customers will be smarting.

"It would be a shame to see PeopleSoft disappear from an architectural point of view as they've created some fairly elegant applications and built a good technology platform to build on," said Eric Schmitt of Cambridge, Mass.-based Forrester Research Inc.

What a mess. And it gets messier.

Just four days before Oracle's bombshell, PeopleSoft had announced it would acquire mid-market software vendor J.D. Edwards. Now JDE is suing Oracle for bringing chaos to what looked like a sealed deal for them.

What's even more noteworthy: This is an IT controversy that doesn't really involve Microsoft, the usual "leading man" of such dramas. Ever since the Microsoft antitrust case was settled, the industry has been sorely lacking in soap opera. Now, at least, there's a new "show" on the air. All we need is a case of amnesia or a long, lost child for the analogy to be complete.

Outsourcing is so in

Offshore outsourcing is such a hot topic that hundreds of people paid more than $1,000 to fly into pricey Los Angeles to stay at a swanky hotel/spa to learn how to save money.

Gartner Inc. held its Outsourcing Summit 2003 in late June. Attendees crammed the sessions on offshore outsourcing; they were especially keen to learn about the cost advantages and sophisticated services that Indian companies have to offer.

"India has the labor pool and the education system, government support, people who are totally driven to do this, facility with English language, [and] familiarity with U.S. culture," said Gartner analyst Rita Terdiman, talking about why India is the outsourcing hot spot. Gartner expects China to catch up with India by 2007.

Terdiman also proclaimed offshore outsourcing an "irreversible mega-trend" -- which basically means it's hot, and it's not going away.

The primary reason why it's not going away -- the promise of cost savings. "I'm getting lot of calls from CIOs who are being challenged by their CEOs to prove that their costs are being managed properly," said David Ackerman, a Gartner vice president.

But money isn't everything. Analyst Neil MacDonald said that it's important to show how outsourcing can help with the three things that keep CEOs awake at night, which according to a Gartner and Forbes Magazine study, are tracking and retaining customers, focusing on core competencies, and business strategy.

At least one vendor agrees: "We're hearing customers say they want IT innovation and people management, not just low cost," said Hewlett-Packard Co.'s Pat Adamiak. "Cost is a driver for outsourcing, but it's not the sole reason businesses do it."


Oracle's overture and offshore outsourcing may be the hottest topics, but the "Coolest Story" award goes to a matador who has a beef with business bull.

"Bullfighter," sent into the ring by Deloitte Consulting, is software that takes a stab at corporate jargon -- the obfuscatory language invented by PR departments to make them sound like they know what they're talking about -- and to confuse the rest of us.

Bullfighter jams a sword deep into terms that would make an MBA blush -- "words" like "incentivize" and "extensible repository." The software red flags them and offers writers of business documents alternatives to such corporate drivel. Alternatives in a language, like, say, English.

Deloitte officials say that firms with something to hide (like Enron) tend to rely heavily on the vexing verbiage -- so maybe the more clearly you write, the more cleanly you do business.

The most hated word among Deloitte employees? "Leverage." My vote goes to "functionality."


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