Oracle Challenges DOJ Case with PeopleSofts Own Documents

By John Pallatto  |  Posted 2004-06-18 Print this article Print

At the Oracle trial in San Francisco, Oracle lawyers confront a PeopleSoft exec with documents that appear to discredit DOJ's market definition theory.

Oracle Corp. attorneys cross examined PeopleSoft senior sales executive Phil Wilmington for more than four hours Thursday to try get him to back off from his position that high-end enterprise resource planning software market is limited to three main players.

While Wilmington, PeopleSoft executive vice president for the Americas, staunchly held to the position that Oracle and SAP AG are its only "viable" competitors in the enterprise market, Oracle presented multiple internal PeopleSoft documents that show the company was worried about what some of the "mid-market" competitors were doing.

These documents threaten to discredit the Department of Justices main argument that that Oracles hostile buyout of PeopleSoft would sharply reduce competition in the market for ERP software to the point were it could illegally control prices. The DOJ is asking U.S. District Court Judge Vaughn Walker to grant a permanent injunction to block the buyout.

Oracle attorney Greg Lindstrom presented a December, 2000 e-mail message from Renee Lorton, PeopleSofts general manager of financial management products, expressing alarm about the news that Microsoft was buying Great Plains Software Inc., a producer of financial management software.

Lorton suggested the Great Plains buyout could be the beginning of a major Microsoft push into financial management software because Chairman Bill Gates views "core" business applications "as a natural extension of the operating system."

PeopleSoft should be on its guard, Lorton indicated, because "I dont believe the claims that they are only targeting the mid-market space."

Microsoft on Thursday offered more details of its enterprise software strategy. Click here to read more. Wilmington said Lorton was only sounding the alarm because she wanted to encourage her immediate superior, Ram Gupta, executive vice president of products and technology, to invest more money in the financial management software business.

Microsoft is still only a mid-market player and doesnt challenge PeopleSoft in the enterprise ERP market nearly four years since Lorton wrote that message, Wilmington noted.

Furthermore Microsoft is saying that it will be at least two more years before it completes its Project Green effort to release a single code base for its four business applications suites, included Great Plains, Navision, Axapta and Solomon, Wilmington observed.

Oracle presented other internal PeopleSoft documents that contained an assessment that Microsoft had set a goal of generating $10 billion in revenue from ERP software sales by 2010. To reach this goal, Microsoft was planning to go beyond the small- and medium-sized business market to target companies with revenue up to at least $800 million.

Wilmington said he wasnt personally familiar with Microsofts business plans and he adhered to his position that PeopleSoft didnt compete with Microsoft for sales outside of the mid-market space.

Next Page: DOJ Lawyers Unconcerned by Document Show

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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