AppsWorld - Oracle exec hints of more bids

Oracle's aggressive bid for PeopleSoft could be just the beginning of a new strategy for the company where it quickly gains...

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 Service

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