The judge overseeing the US Department of Justice's
lawsuit to block Oracle's PeopleSoft acquisition was given a
tutorial in enterprise software.
Judge Vaughn Walker had requested the tutorial to help him
better understand the products and technologies involved in the
case before it comes to trial on 7 June.
Attorneys for the DOJ used segments of a videotaped deposition
from Oracle's own senior executives, including chief executive
officer Larry Ellison, to describe their view of the products and
the market. Oracle's tutorial was given by Ron Wohl, executive vice
president for applications development, and was more technical in
nature.
The DOJ is trying to block Oracle's takeover bid on the grounds
that it would stifle competition. It has argued that the merger
would leave only two companies - Oracle and SAP - to provide the
broad suites of financial management and human resources software
that corporations need to run their businesses. Oracle argued that
there are many more providers of such software.
In a videotape of his deposition made in January, Ellison, under
questioning from a DOJ attorney, discussed the benefits of using a
single, broad suite of applications to run a big businesses. The
alternative method of stitching together "best-of-breed" products
from multiple suppliers is less efficient and more costly, he
said.
"Systems integration is the gift that keeps on giving," he
joked, saying that services companies such as IBM and Accenture
charge customers on an ongoing basis to help them keep a variety of
applications in synch and up to date.
The DOJ also used deposition testimony from Jeff Henley,
Oracle's chairman and chief financial officer, in its tutorial.
They apparently hoped to show Judge Walker that even Oracle's own
executives see benefits in using a broad, integrated suite of
applications, rather than products from multiple suppliers.
PeopleSoft's chief technology officer Richard Bergquist provided
the bulk of the DOJ's tutorial. He began with the basics of
computing, describing chips, "hardware machines", databases and
middleware, and went on to describe PeopleSoft's software.
At one point he asserted that "enterprise software for large
corporations is supplied by SAP, PeopleSoft and Oracle", a remark
that cut to the heart of the DOJ's case against Oracle.
That prompted criticism from Dan Wall, lead counsel for
Oracle, said afterward that the parties were not supposed to use
the tutorials to begin arguing their case. "When you have the
PeopleSoft guy saying there's only three providers then I think
it's clear they are trying to make their case."
Still, Oracle's presentation also seemed to lay the groundwork
for some of the arguments it is expected to make at trial. Like
Bergquist, Wohl began with the very basics of computing, but he
characterised the enterprise applications market as being composed
of "many" suppliers rather than a few.
He went into far more technical detail than Bergquist,
explaining the shift from client/server to internet-based computing
and the importance of technologies such as clustering, data
warehousing and web services. He said that no single customer uses
all the modules and functions in a broad suite of applications, and
that scalability tends to be less important for human resources and
financial management applications, which typically are used by a
smaller number of full-time users.
At the end of Wohl's presentation, Oracle counsel Dan Wall told
the judge, "We don't intend to tell you how many applications
providers are available; we think we can handle that on 7
June."
Judge Walker appeared to listen attentively. He seemed unsure
about middleware, asking at one point if it referred to
"applications tailored for different users", perhaps because
Bergquist had mentioned portals in his explanation of middleware.
Bergquist told him that was not the case, and that middleware is so
called because it sits in the middle of the database and
application layers.
At the end of the tutorials, Judge Walker said, "This is very
helpful, I appreciate it very much."
Speaking to reporters afterward, Oracle's Wall said it is
important for Judge Walker to grasp the technologies involved in
the case, particularly web services. "If you want to understand
this case correctly, you need an understanding of the technologies
involved."
Earlier on Friday, Judge Walker appointed a retired judge to act
as a moderator, or "special master", to help the parties resolve
conflicts over documents that they have requested from each other
and from third parties. Lawyers for both Oracle and the DOJ
complained that they had yet to receive some of the materials they
had requested.
In particular, Wall complained that Lawson Software had, so far,
provided no company documents except those that are publicly
available. He also grumbled that PeopleSoft delivered 140,000 pages
of documents on Thursday night, hours before the deposition of
PeopleSoft president and chief executive officer Craig Conway on
Friday.
Gary Reback, an attorney representing PeopleSoft, responded that
his company has made two million documents available and has made
its CEO available for deposition without being compelled by the
court to do so.
Judge Walker ordered the parties to exchange lists of the
exhibits they will submit at trial by early this week. On Friday
they will meet with the special master to try to iron out their
differences over the subpoenaed documents.
The DOJ had also requested a second deposition of Ellison, and
the parties have agreed it will take place on Sunday.
James Niccolai writes for IDG News
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