Analysts: Ellison Playing Hard Ball with Intellectual Property

By Lisa Vaas  |  Posted 2005-01-26 Print this article Print

Analysts say competitors rushing to offer third-party support in the wake of the Oracle-PeopleSoft merger, should take seriously Larry Ellison's not-so-veiled threats that Oracle will protect its newly acquired intellectual property rights from infringeme

Following SAP AGs pouncing on TomorrowNow Inc., a third-party maintenance provider for PeopleSoft applications, Oracle Corp. CEO Larry Ellison warned that such providers should "be careful" of intellectual property infringement. Analysts said the warning was serious. SAP announced the purchase of PeopleSoft third-party support provider TomorrowNow last week with in-your-face timing: The announcement came a day after Oracles splashy, day-long launch of the newly combined Oracle-PeopleSoft. At the same time, SAP announced a migration program, named Safe Harbor, aimed at letting users maintain current PeopleSoft and J.D. Edwards & Co. applications while migrating to MySAP ERP. Ellison delivered the warning during Oracle Analyst Day Wednesday in New York, in which Oracle forecast aggressive growth for the coming fiscal year.
The Redwood Shores, Calif., database giant forecast pro forma earnings per share growth of 24 percent in fiscal year 2005—a figure far exceeding the 15 percent annually compounded share growth that President Jeff Henley had presented to Oracles board of directors when he laid out a five-year plan for Oracle, assuming no acquisitions, a little over a year ago.
Oracle intends to raise fees for former PeopleSoft customers. Click here to read more. Analysts weighed in on Ellisons warning to SAP. "[It was] a sort of a warning, a shot over the bow in terms of third-party support: what we see as the potential market opening up for third-party maintenance, for companies who feel theyre paying too much," said Paul Hamerman, an analyst for Forrester Research Inc. "Ellison sought to intimidate vendors who want to get into third-party maintenance business, because of the potential issues around the use of source code." Katherine Jones, an analyst at Aberdeen Group, noted that options for third-party support are springing up in the wake of the acquisition, with the market being flooded with support professionals from J.D. Edwards, for example. "People who are very skilled in support for JDE are entering the market with a value proposition thats different from other skills that are out there," she said. "That represents alternatives and choices for the installed customer base [that Oracle acquired]." Next Page: Conexus Aims for JDE Customers

Lisa Vaas is News Editor/Operations for and also serves as editor of the Database topic center. Since 1995, she has also been a Webcast news show anchorperson and a reporter covering the IT industry. She has focused on customer relationship management technology, IT salaries and careers, effects of the H1-B visa on the technology workforce, wireless technology, security, and, most recently, databases and the technologies that touch upon them. Her articles have appeared in eWEEK's print edition, on, and in the startup IT magazine PC Connection. Prior to becoming a journalist, Vaas experienced an array of eye-opening careers, including driving a cab in Boston, photographing cranky babies in shopping malls, selling cameras, typography and computer training. She stopped a hair short of finishing an M.A. in English at the University of Massachusetts in Boston. She earned a B.S. in Communications from Emerson College. She runs two open-mic reading series in Boston and currently keeps bees in her home in Mashpee, Mass.

Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel