Governments Case

By John Pallatto  |  Posted 2004-07-23 Print this article Print

But the government has argued that Oracle and PeopleSoft are stronger in the U.S. market than SAP because U.S. enterprises prefer to buy software from domestic vendors. Thus, U.S. customers would face a greater impact if PeopleSoft disappears in a merger with Oracle.

Walker seemed impressed by testimony from multiple PeopleSoft customers who said they feared that Oracle would pressure them to spend millions of dollars to make an untimely switch to Oracle applications.

"How do I deal with this compelling testimony from all these customers who got on the stand and testified?" Walker asked Oracle lead attorney Daniel Wall.
Wall tried to assure Walker that Oracle would have no interest in alienating PeopleSoft customers after spending $7.7 billion to acquire the company. Oracle would provide continuing support for PeopleSoft products, Wall said.

Walker wondered aloud how he might reach a decision when the expert witnesses who testified in the trial "have forgotten more about" enterprise applications software "than I will ever know."

Click here to read about why auto maker DaimlerChrysler fears it would have to spend as much as $100 million to replace its PeopleSoft applications if the court approves the Oracle buyout.

But one thing was clear. Nobody comes off in this legal affray as a shining white knight.

PeopleSoft has been playing the role of a scrappy, vulnerable competitor fighting to retain its independence against a greedy and predatory Oracle.

But its clear that PeopleSoft was prepared to make a deal with Oracle if it could have had some assurance that PeopleSoft senior executives would still be around to control the support and future development of PeopleSoft applications.

The talks about combining the two companies applications business collapsed when Oracle made it clear that it would insist on an Oracle executive heading the new group. Next Page: The price of a hostile buyout.

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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