Oracle steals market share from PeopleSoft

Elinor Mills Abreu

SAN DIEGO: Oracle Corp. executives said that the software provider has been taking market share from its rivals in business applications, including PeopleSoft Inc., its hostile takeover target.

Oracle has been wooing away PeopleSoft customers and will continue doing so if it is unable to acquire PeopleSoft, Charles Phillips, one of Oracle's two presidents, said at Oracle AppsWorld, a conference the company holds for customers of its business applications software.

Oracle executives downplayed speculation in published reports that U.S. regulators were leaning against approving the company's proposed $7.3-billion takeover bid of PeopleSoft.

"It's hard to handicap the Justice Department," Phillips said. "We've complied with all the requests. All the developments and all the news out there don't mean anything until the regulators decide."

He declined to say whether Oracle would consider raising its offer price from $19.50 to closer to PeopleSoft's current share price of just under $23. "We'll deal with that when we get to it," Phillips said.

The U.S. Department of Justice is expected to decide on the proposed merger, based on antitrust grounds, by early March, Oracle spokesman Jim Finn told reporters.

Oracle Chief Executive Larry Ellison has said that he is prepared to go to court if the Justice Department tries to block the takeover, Finn said.

European Union antitrust regulators are expected to decide on the proposed merger in April.

The business applications market is dominated by Germany's SAP AG, followed by PeopleSoft and its newly acquired J.D. Edwards unit.

Oracle is third in the market, but second in overall software sales to Microsoft Corp., with about 80 percent of Oracle's business being in databases.

Last week, Oracle, based in Redwood Shores, California, named five candidates it would nominate for PeopleSoft's board and said it may submit a proposal to increase the number of directors to nine from eight.

In his keynote speech, Oracle Chief Financial Officer, Jeff Henley, who was named company chairman earlier this month, said that while the technology industry was recovering, further consolidation remained inevitable.

"The industry will continue to mature. There will be continued consolidation," Henley said. "There will be fewer and fewer players."

At the conference, attended by about 10,000 people, Oracle said it would release by the summer a new version of Oracle Warehouse Management software that will include radio frequency identification capabilities to help companies track inventories.

© Reuters