We will win PeopleSoft battle, says Oracle chief

Oracle president Chuck Phillips has claimed the US Department of Justice lawsuit is no obstacle to his company's takeover bid for...

Oracle president Chuck Phillips has claimed the US Department of Justice lawsuit is no obstacle to his company's takeover bid for PeopleSoft.

Phillips made those comments when he addressed a group of PeopleSoft World users yesterday. The event was sponsored by user group Quest, which PeopleSoft inherited when it acquired JD Edwards last summer. 

Quest directors had invited Phillips, widely seen as Oracle's point man on the deal, to discuss possible outcomes if the hostile bid is successful. Officially, Quest does not support the merger. PeopleSoft had also been invited, but declined to attend. 

Oracle has been working since June to buy out PeopleSoft for $9.4bn, but last week the DOJ said it would sue Oracle to block the deal. Although a number of analysts have written off the bid as already failed, Phillips reiterated Oracle's commitment to fight the government. 

"We should play to win," he said. "No one said this would be easy." Other companies have fought the DOJ and won, he added, and he claimed Oracle has a better case than some of them. 

"It's hard to say how long this will take," Phillips said. "We'll be going to court over the next few months and see what happens there." 

Phillips tried to rebut the government's case and contradicted a report he himself signed when he was an analyst at Morgan Stanley. In that document, Phillips said there were only "three viable suppliers" to reautomate back offices, and that the back-office applications market was "an oligopoly comprised of SAP, PeopleSoft and Oracle". 

Phillips' own statement was included by the DOJ in its complaint against Oracle. 

In an apparent about-face, Phillips claimed that the government's case is focused around the enterprise market for human resources and financial applications, and he said it will be up to the DOJ to show that that market segment would comprise only Oracle and SAP should the deal succeed. 

He argued that there would still be competitors, including the much smaller Lawson Software and Geac Computer, adding that industry leader SAP has three times the market share of Oracle. 

Phillips also told the members of the user group that they will benefit from a "high-quality, truly global" customer support programme if Oracle succeeds. He said Oracle would work with rival database suppliers to help support applications such as IBM's AS/400 DB2 database, which powers the JD Edwards World suite. 

Phillips declined to make specific predictions or promises, because he does not know what direction PeopleSoft plans to take with the World applications. However, he said that the most "critical constituent was the customer" and alienating customers would be a bad way to spend $9.4bn.

Marc L Songini writes for Computerworld

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