Answering the long-asked question of whether Microsoft Corp. will testify in the U.S. Department of Justices much ballyhooed case against Oracle Corp., the Justice Department released Tuesday night its witness list, and it included the software giant.
The Justice Department will call Microsoft to the witness stand to support its claim that Oracles proposed—and hostile—takeover bid of PeopleSoft Inc. is bad for competition in the upper echelons of the ERP (enterprise resource planning) software industry. The DOJ has defined competition in the upper echelons of the ERP software industry as between Oracle, PeopleSoft and SAP AG.
Oracle, of Redwood Shores, Calif., is arguing that the market is much larger and points to companies like Microsoft and others as encroaching competition.
Microsoft—which is also being called to the witness stand by Oracle—said in the past that it does not plan to enter the enterprise ERP market any time soon—or at least not within the next two years.
Doug Burgum, eclectic senior vice president of Microsoft Business Solutions, is expected to testify for just under an hour and a half on the companys software, its competition and the significance of that competition on the market.
PeopleSofts chief technology officer, Rick Bergquist, is also expected to testify for 2 hours, likely mirroring the Justice Departments sentiments that competition would indeed be hampered by an Oracle acquisition of PeopleSoft. Hell also talk about the requirements of enterprise clients, and the entry and repositioning conditions for midtier vendors.
PeopleSoft, of Pleasanton, Calif., has fended off at least three different tender offers from Oracle on the grounds that they devalue the company. The latest offer stood at $26 per share, or $9.4 billion, at least until earlier this week when Oracle lowered its bid for PeopleSoft by $5 per share, to $21, or about $7.7 billion. PeopleSofts board is reviewing the revised bid and will undoubtedly reject the offer.
Richard Allen, a former PeopleSoft employee, is slated to testify for 2 hours about the failed attempts of J.D. Edwards & Co. to enter the tier one market defined by PeopleSoft, Oracle and SAP. Oracle launched its first bid for PeopleSoft last June, days after PeopleSoft announced its intent to acquire J.D. Edwards. That deal was closed last August.
The Justice Department will also leverage PeopleSofts extensive customer list, calling to the stand DaimlerChrysler AG; Cox Communications Inc.; CH2M Hill Inc.; Verizon Communications Inc.; Neiman Marcus Group; Pepsi Americas; Apartment Investment & Management Co.; BearingPoint Inc.; Nextel Communications Inc.; Metro North, New York; Charles Schwab & Co. Inc.; the state of North Dakota; Kerr-McGee Group; Erie County, N.Y.; Greyhound Lines Inc.; and Cap Gemini Ernst & Young U.S. LLC.
The customers are expected to testify about their particular software needs; their decisions, plans and experience in licensing, implementing and upgrading ERP systems; competition among software vendors; and the likely impact of the proposed transaction.
Nancy Thomas from the Business Consulting Services division of IBM Global Services will testify for an hour and a half on the software selection and implementation services it provides to customers; vendor characteristics and attributes of ERP software; and the selection process for human resources and financial software, including “disclosed information,” according to Justice Department documents.
Marco Iansiti from the Harvard Business School will testify for 3 hours on enterprise requirements for ERP software, and the capability and suitability of various vendors.
Kenneth Elzinga from the University of Virginia and Preston McAfee from the California Institute of Technology will provide a combined 5-hour economic analysis of the proposed deal.
Finally, Mark Zmiejewski of the University of Chicago and Chicago Partners will provide a 2-hour rebuttal to any argument Oracle presents on the efficiencies of the proposed deal.
The trial is scheduled to begin June 7 in a San Francisco court.