Oracle's aggressive bid for PeopleSoft could be just the
beginning of a new strategy for the company where it quickly gains
ground in the slipping enterprise applications market by scooping
up competitors, an Oracle executive hinted yesterday."If consolidation is going to happen, we'd
rather drive it than watch it," said Chuck Phillips, Oracle's
executive vice president in the office of the chief executive
officer, said at the company's AppsWorld conference in London.
Phillips, a recent Oracle recruit who has
spent years on Wall Street as an analyst covering enterprise
software, confirmed that his addition to the company helped mark
the strategy change.
His comments came a day after Oracle chairman
and CEO Larry Ellison left the door open for a further increase in
its already sweetened bid to acquire PeopleSoft.
"Never say never," Ellison said during a
keynote address at AppsWorld on Tuesday when asked about the
possibility of an increase to Oracle's $6.3bn unsolicited offer for
PeopleSoft.
Phillips said Oracle believes that there needs
to be a consolidation in the market given the slowed growth in
enterprise application sales in recent years. He shrugged off
claims made by PeopleSoft's board that a merging of the two
companies would raise antitrust concerns. "We think there are
plenty of players out there," he declared.
Microsoft is also becoming a more active
participant in the market and the future strength of open-source
competitors cannot be ruled out, Phillips said.
PeopleSoft has accelerated its acquisition of
JD Edwards, but Phillips said Oracle has still not decided if it
wants to take JD Edwards on along with PeopleSoft.
JD Edwards is culturally different than both
Oracle and PeopleSoft and that there are "incremental risks" in
taking on both companies at once, he said.
Oracle is concentrating on getting PeopleSoft
customers and shareholders to support the buy, Phillips said. In
private conversations with shareholders, they have expressed
"surprise and annoyance" that the PeopleSoft board refuses to meet
with Oracle, he claimed.
"In this era of corporate governance and
disclosure it's almost unheard of to not at least meet with us,"
Phillips said.
In addition to direct meetings, Oracle is
targeting PeopleSoft customers and shareholders through a
high-profile media campaign. The company ran an ad on the front
page of Wednesday's Financial Times, declaring its commitment to
support PeopleSoft products as well as to migrate PeopleSoft
customers to Oracle's E-Business Suite via free module-to-module
upgrades.
"We need more products, more distribution
partners and more channels - that's part of our plan over the next
five years," Phillips said.
And, to gain all those elements quickly, more
acquisitions seem to be on Oracle's agenda. "Oracle, and Larry in
particular, has changed its views on acquisitions in the past
year," Phillips said.
Scarlet Pruitt writes for IDG News
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