The DOJs High-Function Ability to Just Make Stuff Up

By Lisa Vaas  |  Posted 2004-07-01

The DOJs High-Function Ability to Just Make Stuff Up

When Judge Vaughn Walker said last week that he was still fuzzy on the meaning of terms that have been bandied about quite a bit already in the trial against Oracles merger with PeopleSoft, both Oracle and many antitrust experts quoted in the media leapt to the conclusions that a) the DOJ had simply made up its definitions, particularly that of "high-function software," and b) that haziness at such a late date on these terms—which are pivotal to the DOJs claims that the market is ruled by only three vendors—bodes ill for the DOJ.

"I think he understands that high-function is a phrase thats made up," Oracle attorney Daniel Wall told the Associated Press. "Were three weeks into the trial, and the government still hasnt been able to come up with a clear definition."

Ive been scoffing at the made-up term "high-function software" along with everybody else, but I thought it would be fun to get the DOJ on the phone to dissect some of this terminology.

Renata Hesse, chief of networks and technologies for the DOJs antitrust division, which brought the case against Oracle, concedes that the industry doesnt use the term "high-function software." That doesnt mean that the DOJ made it up, though, Hesse told me.

Rather, its a "descriptive term" the DOJ developed "to put some parameters around the information that we got from Oracle, from PeopleSoft, from customers, from system integrators, both during the investigation and trial, about how this marketplace functions," she told me.

In his testimony, Oracle CEO Larry Ellison claimed that PeopleSofts Craig Conway blew earlier talks to merge the two companies. Click here to read more.

And just what exactly would the difference be between a made-up term and a descriptive term? You got me there.

Of course, if you talk to somebody who follows this space, all of those terms are familiar. Except the high-function software one, of course, with it being made up. Or descriptive. Whatever.

Paul Hamerman, a Forrester analyst, has just published a report on human resources management systems in which he dissects seven HRMSes to ascertain what exactly separates a high-function HR system from one that supports a midmarket customer.

The DOJ will be pleased to hear that Hamerman found a clear separation between the three top vendors—SAP, PeopleSoft and Oracle—and the midmarket players.

There are indeed global and local capabilities in these top vendors systems that are clearly superior to other systems. For example, the ability to handle statutory requirements in various countries, such as payroll calculations and compliance-related issues.

Theres just more depth to strategic HR functions around developing people, management their competencies and managing their performance when you deal with the top vendors HR systems, Hamerman found.

Next page: Scalability delineates high-function software.


Another issue in making the case that the high-end market is dominated by three players is the question of scalability. The top three can scale out to hundreds of hundreds of users.

They also can handle large volumes of data. Compare them with Microsofts Great Plains software, which is a Windows-based client/server system that doesnt scale to the degree needed by a large company, nor does it have functional depth in strategic HR functions.

Another area that separates larger vendors is self-service capabilities. After all, a large part of the value proposition is eliminating paperwork and the need for humans having to get their hands on this stuff.

Youd think that somebody like Hamerman would be putting his money on the DOJ to win, but even after doing a thorough evaluation of the software thats at the heart of this trial, and even after determining that theres a clear difference between "high-function" software and not-so-high-function software, hes not coming down on either side.

"I cant call how its going to play out," he told me. "The DOJ arguments on the surface make sense to me, but theres some murkiness around definition of terms and of the market, and whether the court will hold that market definition valid in stopping this particular combination."

It sure has been interesting. The sales presentations have been fun in particular. "Attack PeopleSoft," anybody? Oh, those Oracle salespeople. Theyre so high-spirited.

Oracle sought the advice of Computer Associates Sanjay Kumar regarding how to get DOJ clearance on its PeopleSoft bid. Click here to read more.

As far as reading negative omens for the DOJ into Judge Walkers request for clarification, thats just pure spin. Donald Barnes, an antitrust specialist at the Washington, D.C., firm Porter Wright Morris & Arthur LLP, thinks that Walkers just being diligent in his attempt to understand some technical terms that the parties have been using—or inventing, as the case may be—during the trial.

"Its not surprising that in dealing in a highly technical area, the judge wants to be absolutely sure he fully understands the implications of the terms," Barnes told me. "It doesnt suggest to me that he hasnt been paying attention."

Not paying attention? Perish the thought. I ask you, whose attention would wander when trying to ascertain the meaning of the word "function?" Or, for that matter, the rest of the terms, which include functionality, financial management software, human resources management software, legacy system and enterprise resource planning?

I think all of this term definition is good. I think all of this making up of terms is even better. It makes me want to dissect the meanings of other baffling terms weve parlayed for some time, with an eye toward figuring out if theyre just figments of some descriptive imagination. And given the recent news, theres one term thats calling out for a discussion of its provenance and potential made-up-ness.

To wit: Internet Explorer security.

Write to me at Associate Editor Lisa Vaas has written about enterprise applications since 1997.

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