If Oracle's takeover of PeopleSoft falls through, the software maker may go after its second choice - Siebel Systems.
Siebel is second on the company's wish list, said Oracle chief executive officer Larry Ellison at a US court as part of the US government's case to block the $7.7bn (£4.2bn) hostile takeover bid of PeopleSoft.
Ellison was asked if Oracle would be able to compete in the enterprise software arena through acquisitions other than a merger with PeopleSoft. He replied that Oracle would be competitive regardless of an acquisition, but that acquisitions would help and that a PeopleSoft takeover would allow it to compete most effectively.
"They [PeopleSoft] have got... a larger and more important customer base than our second choice, which would be Siebel," Ellison said.
Siebel sells CRM software, while PeopleSoft sells a range of business applications, including software that allows businesses to manage human resources, finances and supply chain and customer relations.
Oracle president Safra Catz testified that Oracle had courted JD Edwards shortly before launching the PeopleSoft bid.
Jeff Henley, Oracle's chairman and chief financial officer said Oracle had also considered buying Lawson Software.
Oracle wants to acquire suppliers to expand its customer base. In PeopleSoft's case, Oracle expected an acquisition would allow it to sell more of its database and application server software to PeopleSoft customers who may run competing products from suppliers including Microsoft and IBM, Ellison testified.
The US Department of Justice (DOJ) said an Oracle-PeopleSoft merger would stifle competition in the market for high-end human resources and financial management applications, resulting in higher prices. Oracle said there are a number of other competitors, and that other suppliers such as Microsoft could enter the market at any time.
As part of its case, the DOJ also called California Institute of Technology professor Preston McAfee, a witness Oracle had tried to get excluded.
McAfee reviewed Oracle's discounting practices and found the supplier's prices are between 13% and 26% lower when competing against PeopleSoft. McAfee also testified that Oracle's prices would likely rise between 5% and 30% if PeopleSoft was not competing.
Oracle attorney Dan Wall attacked McAfee's testimony. Under McAfee's merger theory prices will always go up, Wall argued.
The outcome of the case is likely in August or September.
Joris Evers writes for IDG News Service