Analysts had long been predicting consolidation in the enterprise software space, but few could have foreseen the maelstrom that would engulf the sector in 2003 when Oracle announced a hostile takeover bid for PeopleSoft.
Oracle dropped its bombshell bid on June 6, just four days after PeopleSoft announced its friendly takeover of JD Edwards.
PeopleSoft immediately went on the defensive. It started putting measures in place to block the bid, including invoking a clause in its constitution that would allow customers a rebate of five times the cost of their software licence if PeopleSoft is bought within two years and if support for the product the customer uses is withdrawn within four.
Lawsuits have flown from both Oracle and PeopleSoft, ensuring lawyers will be among the winners, regardless of whether Oracle succeeds.
PeopleSoft says the bid is dead in the water, but Oracle says it's still all on, pending approval from regulators in the US and Europe.
Any decision from those bodies won't be made until next year, but Oracle continues its efforts in the meantime, most recently by submitting a list of pro-takeover candidates for PeopleSoft shareholders to consider at the company's 2004 shareholders meeting.
It has also raised the value of its offer several times, from the initial $US5.1 million, to $US6.3 million following PeopleSoft's acquisition of JD Edwards to the latest offer of $7.3 billion.
So what would an Oracle takeover mean for PeopleSoft customers? Oracle has said while PeopleSoft products would no longer be sold, Oracle would support present versions for another 10 years.
At an online "town hall" meeting in which PeopleSoft customers were invited to submit questions, Oracle executive vice president Chuck Phillips said "the very fact we aren't going to be actively marketing the PeopleSoft products is actually what makes the acquisition so profitable."
Phillips was candid about where Oracle sees most of its income coming from in future years.
"We want to get out of the licence business because the better business is the maintenance business longer term."
Oracle's takeover bid for PeopleSoft was the most publicised and audacious play in the enterprise software world last year, but its outcome is still uncertain.
PeopleSoft's takeover of JD Edwards became a done deal in September. The integration path was revealed shortly afterwards, with JDE's OneWorld line to become PeopleSoft Enterprise One and its AS/400 World range to turn into PeopleSoft World.
Speculation quickly arose that the PeopleSoft world line would become the poor cousin in PeopleSoft EnterpriseOne and PeopleSoft Enterprise, the set of pre-merger PeopleSoft apps, but PeopleSoft has insisted that won't be the case and that green screen users, for instance, will continue to be fully served.
Having said that, PeopleSoft chief executive Craig Conway acknowledged in October that "the AS/400 product is supported both in World and EnterpriseOne, [but] most innovations are on the modern architecture."
Approximately 1000 staff of the combined company lost their jobs, including 35 in Australia. None were let go in New Zealand, though former NZ JDE head John Speed shifted to Australia to manage a territory there.
The consolidation of JDE into PeopleSoft and possible consolidation of PeopleSoft into Oracle vindicated those who predicted consolidation but raised the question of what it means for other vendors, such as the sector's largest, SAP.
Leo Apotheker, the German stalwart's global field operations president, said in July that consolidation was forcing down margins in the enterprise apps sector.
"We are faced with some extraordinary things that people are willing to do on the other side, that requires from us a certain amount of flexibility we would not normally have offered."
However, Kagermann also said mid-year that uncertainty surrounding Oracle's had increased customer interest in SAP.
"What we are seeing is some interest, some demand, some leads coming into the pipeline."
SAP, along with Oracle and Microsoft, made a concerted push into the small and medium-sized enterprise space, offering scaled-down versions of their wares and products rebadged from acquisitions.
MySAP All-In-One and Business One, were pushed to SME customers. MySAP All-In-One is an industry-specific templated product based on SAP's flagship R/3 enterprise line, while Business One is the result of SAP's acquisition of Israeli company Top Manage. Another enterprise level product, mySAP ERP, was launched in March as an alternative migration path for R/3 customers.
At the higher end of the scale, SAP released R/3 version 4.7, also known as R/3 Enterprise, which has been taken up in New Zealand by Toyota and Fletcher Challenge Forests.
Oracle continued pushing the "special edition" of its e-business suite and likewise Microsoft with its SME products such as Great Plains, Navision and Axapta. IBM also began marketing Express versions of its product lines.
The SME space poses challenges for vendors more used to targeting bigger customers, as different types of reseller and distributor arrangements need to be made.
Another trend in enterprise software last year was grid or utility computing. The two are linked but the first emphasises the use of multiple, separated computers to complete tasks and the second emphasises IT cost based on use.
Oracle launched its 10g database, which is geared for grids, while IBM grid-enabled its WebSphere application server, as well as releasing grid computing products for a range of industries including electronics, higher education and petroleum.
Computer Associates upgraded several of its Unicenter network management products to support customers looking at a grid environment and Veritas did likewise, announcing upgrades to its storage back-up products to gear them for grid.
Veritas also released CommandCentral, a utility application for back-up and recovery on disk subsystems.
Sun and HP also made noises about the grid/utility model, though HP chief executive Carly Fiorina said the full fruition of the grid vision was some time away.
"HP's goal is for the grid to go for IT resources what the web did for documents -- provide ubiquitous and easy access," she said in September. "Now we are, of course, many years away from that vision."
Analyst firm Gartner sounded a note of caution, noting "marketers are exploiting the perception that grid is an advanced technology and in many cases are applying the term to offerings that at best have only a tenuous relationship with the strict definition of a grid".
For its part, Siebel Systems laid off staff and made a third quarter loss last year, but launched new products including an SME CRM product and a hosted CRM service, the result of its acquisition of California vendor UpShot.
All in all, things weren't exactly rosy in the enterprise software space in 2003. Things are predicted to improve next year, but it's timely to bear in mind Gartner's prediction that 50% of existing software companies won't be around in two years' time.