Software sounds so space-age that it's hard to imagine it's a thing of the past. Whip-smart geeks coding around the clock, hackers dreaming up new pranks to unleash upon an unsuspecting world, Sybase's gleaming Emeryville campus -- it was all so giddy, and the future seemed unlimited. It turns out the future had very definite limits, and the software industry, which once seemed unlike anything that came before it, turned out to be just another line of business, as subject to the laws of economics as automaking.
Twelve months ago, Oracle's Larry Ellison drove this point home when he emerged triumphant in a titanic struggle to buy and kill PeopleSoft, the Pleasanton maker of executive software. Just as Ford and General Motors did decades earlier in the auto industry, three or four major players were killing off lesser competitors in the enterprise software industry. Oligopoly capitalism had claimed another victim.
Pleasanton could have been Flint, Michigan. Days after the PeopleSoft acquisition was finalized, Oracle announced plans to lay off five thousand employees from both companies. The PeopleSoft homicide was the largest single economic casualty in the East Bay since the massive military base closures of the early 1990s. Silicon Valley was still struggling to emerge from the dot-com collapse, and now the job market had to reabsorb thousands of tech workers. How would all these people rebuild their lives?
Fairly easily, it seems. Almost all the former PeopleSoft employees interviewed for this story landed on their feet and put the past behind them. For all the talk of high-tech's problems, PeopleSoft's minions seem to have reinvented themselves within months of getting their pink slips, just as Bill Clinton once warned that we all might one day have to. If this were Detroit, those thousands of unemployed factory workers would still be on the breadline. But since Silicon Valley's real product is intelligence, its cubicle dwellers have always found new ways to make money. So, it seems, have the alumni of PeopleSoft.
In fact, not every PeopleSoft employee was laid off. When Oracle bought the company, its officials promised to retain 90 percent of the company's development and support staff. Beth Bemis was one of those employees; she still works at Oracle, developing internal Web sites. But many of her peers jumped ship: "I think the attrition rate's been pretty high," she says. "There were a lot more jobs out there this year than a couple of years ago. A lot of recruiters were looking for PeopleSoft people. We've all gotten our fair share of headhunters calling us. ... Realistically, the best way to get an increase in salary is when you change jobs. So switching companies is one of the fastest ways to do that."
That's exactly what Kimberly Dill did. Last January, she knew her head could be on the block. So she spent the day at the spa. "I said, if I'm going to get some bad news, I'm at least going to enjoy myself."
Sure enough, she was laid off. But she spent barely a month on unemployment before grabbing a new job that paid her even more than her last one. "Let's just say that I was happily surprised," Dill says. "Because it had made so many headlines, companies were just waiting for us. ... I had multiple offers to choose from. ... Although it started out as something I had hesitations about and was scared of, it opened so many doors for me. I look back on PeopleSoft more fondly, because it gave me the opportunity to do so many other things. PeopleSoft gave me that credibility."
One of the reasons that Dill found employment so easily was that she was in marketing. She illustrates one of the most common misperceptions about Silicon Valley. Sure, its core businesses may be semiconductors, software, servers, and the like, but most people don't actually develop the products. Most work in ancillary fields like accounting, logistics, operations, and, most prominently, marketing and sales. For all the talk about PeopleSoft's special culture, and Oracle's totalitarian, Larry-might-personally-decapitate-you-with-his-friggin'-samurai-sword atmosphere, the truth is that both companies shared much of the same culture. And as Kimberly Dill found out, direct marketers can always get another gig.
The same can't exactly be said for the techies of PeopleSoft. Although Silicon Valley has recovered from the dot-com bust, and Google seems to triple its revenue every few months or so, Silicon Valley employers aren't hiring. This is largely due to the fact that valley innovations such as Internet communications helped wipe out geographical barriers and allow the tech industry to outsource many engineering chores to places like Bangalore. Back when enterprise software was the next big thing, you still had to live within commuting distance of the company. Now, of course, it's a different world.
Noel Mabry found this out the hard way. He worked as a network analyst for four years before Oracle laid him off, but everywhere he turned, his colleagues crowded around him, scrambling for fewer and fewer jobs. "There's so much competition," he says. "I started looking for work in the IT industry right when I found out about the merger, and not only are you competing with people who are out of work, you're competing against people who still have a job. People with jobs three or four steps higher than my level were accepting jobs at my level, just because of the competition."
After a few fruitless months of looking, and with a second child on the way, Mabry switched over to home appraisal, hoping to cash in on the real-estate market. But it's still slow going; he makes about half what he did at PeopleSoft, and his wife has to keep her job until his prospects improve. "That depends on what the housing market and the interest rates are at," he frets.
Mabry isn't the only one who saw gold in real estate. Kathryn Marguglio worked a PeopleSoft marketing gig, but decided to leave after the merger and picked up her real-estate license. She works with Coldwell Banker in Danville, selling tract homes in the East Bay's outer suburbs. At first glance, it doesn't seem like the smartest career move: With the market the way it's been the last few years, who isn't a real estate agent these days? But Marguglio claims her PeopleSoft background gives her a special edge. She brands herself as the East Bay's "real-time Realtor," and focuses on younger, tech-savvy customers. "I actually did take a lot of the tools that we used to market to our PeopleSoft customers and incorporated that into my business," she says. "I felt I had a certain niche that most people didn't have."
In fact, real estate may be the only sector that can do what software only promised to do -- never grow old. Software companies have gone the way of steel mills, automakers, and department stores. All of these industries were born in a period of dynamic expansion, and hundreds of companies scrambled to hit the big time. Then these markets became glutted, firms went bankrupt, and three or four big players eventually survived to dominate their respective industries. But as long as we still have farmland on which to plant another crop of exurbs, real estate will live on. PeopleSoft is dead. Long live KB Home.
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