Judge Vaughn Walker asks witnesses for a clearer definition between midmarket and enterprise software customer needsa definition that goes to the heart of the case.
Closing the first week of testimony in a no-jury trial that seeks to block Oracle Corp.s $7.7 billion takeover of competitor PeopleSoft Inc., U.S. District Court Judge Vaughn Walker on Thursday sought a clearer market definition, according to news reports.
Walker, presiding over the U.S. Department of Justices suit against Oracle in the U.S. District Court, Northern District of California, asked witnesses for a clearer definition between midmarket and enterprise software customer needsa definition that goes to the heart of the case.
To substantiate its definition of the market, the Justice Department called to the stand several witnesses, including Richard Allen, former chief financial officer of J.D. Edwards & Co., which was acquired by PeopleSoft
last summerdays before Oracle announced its hostile bid.
Allen spoke about JDEs failed attempts at retooling its midmarket software suite for the enterprise market, according to news reports.
Allens testimony is central to the Justice Departments allegations that a merger between Oracle, of Redwood Shores, Calif., and PeopleSoft, of Pleasanton, Calif., would reduce competition among tier one ERP (enterprise resource planning) providers from three playersOracle, PeopleSoft and SAP AGto two.
Why should you still pay attention to the DOJ-Oracle trial? Find out here.
While Oracle defends its position that the enterprise market is indeed larger than the Justice Departments definitionand includes midmarket players such as Microsoft Corp. and Lawson Software Inc.the Justice Department contends that it is too costly and difficult for midmarket vendors like JDE to scale its software to enterprise customers in time to fill any holes left by a combined Oracle and PeopleSoft.
The Justice Department also called to the stand systems integrator BearingPoint executive Keith Perry, who testified that both IBM and Microsoft have plans to offer enterprise ERP software, according to a Reuters news report.
Perrys testimony appears to run counter to the Justice Departments definition of the market. However, that could depend on a couple of things: first, the timing of those entrants. IBM and Microsoft would have to enter the enterprise software market within two years to affect competition, according to antitrust guidelines. Second, whether Perrys testimony is accurateMicrosoft claims it is focusing on the midmarket for the foreseeable future and IBM denies the claim.
"Weve been on record since 1999 saying we are not in the application business," said John Riley, spokesman for IBM. "Weve said we are going to partner with application providers for that piece of the business, and thats what weve built our partner business on."
Why Oracle claims expert is unqualified.