Forcing Oracles Hand

By John Pallatto  |  Posted 2005-03-22 Print this article Print

In a highly competitive industry that often operates on razor-thin profit margins, retail customers are highly averse to costly and complicated technology upgrades, she said. "SAP is better off with out Retek," Rosenblum said, because it can probably achieve more by acquiring a more compatible retail software company or by extending its retail application suite through in-house development, she said. Oracle CEO Larry Ellison noted that the company wasnt thinking about acquiring Retek after spending more than $10 billion to acquire PeopleSoft. However, SAPs $8.50 offer for Retek forced Oracles hand, he said.
To read more about the bidding competition for Retek, click here.
"We really expected to take a rest after PeopleSoft," he said. "The timing on Retek was not determined by us. SAP announced a purchase of Retek, and we thought the retail industry was strategic for us and we had to respond," he said. While Oracle officials indicated that there will be no additional corporate acquisitions this quarter, Catz said the company will "remain opportunistic" about future acquisitions when attractive deals appear. Oracle typically does at least a few small corporate acquisitions "every quarter generally—at different times," she said. Catz also confirmed why former Oracle CFO (chief financial officer) Harry You resigned from the company after only eight months on the job. You "got an offer he couldnt refuse" when technology integrator and consulting company BearingPoint Inc. hired him as its CEO. Click here to read Evan Schumans commentary on what a Retek buyout means for the retail industry. You is a veteran of technology consultant Accenture LLC, and BearingPoint needed to hire a new CEO to address its own "urgent financial issues," Catz said. Oracle is preparing to launch a search for a new CFO, and in the meantime, it has a "deep and stable bench" in its financial group, Catz said, adding that former CFO Jeff Henley remains with the company as its chairman. Ellison also answered persistent questions about whether Oracle is actually losing market share in its core database market. He cited recent database market research by International Data Corp. contending that Oracle is gaining market share on the high end from IBMs DB2 mainframe relational database. Over the past year, "our market-leading position has gone up from a little over 40 percent of the global database market to a little over 41 percent" of the market based on the IDC research, Ellison said. IBMs share has declined from 31.8 percent to 30.6 percent during the same period, Ellison said. He contended that Oracle will continue to gain market share at IBMs expense as corporate customers shift from IBM mainframes to large Unix servers and Oracle database grids. On the low end, Ellison said only two database companies are expanding their market share: Oracle and Microsoft. But he said Oracle is in a better position to expand its market share on the low end because Microsofts database products run on Windows while Oracles products run on Linux and Windows, along with a number of other operating systems. Ellison said he expects that Oracle will gain market share as corporate users shift from using Windows to running Linux on servers. Check out eWEEK.coms for the latest database news, reviews and analysis.

John Pallatto John Pallatto is's Managing Editor News/West Coast. He directs eWEEK's news coverage in Silicon Valley and throughout the West Coast region. He has more than 35 years of experience as a professional journalist, which began as a report with the Hartford Courant daily newspaper in Connecticut. He was also a member of the founding staff of PC Week in March 1984. Pallatto was PC Week's West Coast bureau chief, a senior editor at Ziff Davis' Internet Computing magazine and the West Coast bureau chief at Internet World magazine.

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