Oracle Eyed Other Deals

Before it settled on PeopleSoft, Oracle considered acquiring one of more than a half-dozen other high-profile software companies, including BEA and Sybase.

Before it settled on PeopleSoft Inc. last year, Oracle Corp. considered acquiring one of more than a half-dozen other high-profile software companies, according to internal documents presented last week in a trial to determine if the U.S. Department of Justice can block the PeopleSoft deal.

Oracle, in reaction to what it saw as an increasingly competitive IT market, was intent on making an acquisition that would make the company a serious platform competitor to IBM and Microsoft Corp., the documents read.

In fact, in April last year, Oracles board of directors entertained a list of nine software companies, including BEA Systems Inc., Sybase Inc., Documentum Inc. and business intelligence developer Business Objects S.A. Enterprise software provider PeopleSoft, of Pleasanton, Calif., also featured prominently in the presentation, as did business software makers J.D. Edwards & Co., Lawson Software Inc., Cerner Corp. and Systems & Computer Technology Corp.

Oracle CEO Larry Ellison, in videotaped testimony presented at the trial in U.S. District Court in San Francisco last week, said the Redwood Shores, Calif., company also considered buying CRM (customer relationship management) software vendor Siebel Systems Inc.

"Do we think [PeopleSoft] is the best acquisition that would enable us to compete most effectively? The answer is yes," Ellison said. "We think they have a good engineering team. They have a large customer base, a larger and more important customer base than our second choice, which would be Siebel."

Oracle officials contacted last week would not comment further on acquisition plans, but Chief Financial Officer Jeff Henley in an earnings call with financial analysts earlier this month said the company expects to make more than one acquisition in the next year.

Of all the possible marriages that could come from such plans, a union between Oracle and BEA would change the dynamics of the industry the most, some IT managers said.

"The two together would be a good match," said Sam Patterson, CEO of ComponentSource, a BEA partner in Kennesaw, Ga. "We need more than just a two-player world [between IBM and Microsoft]."

Still, some Oracle customers did not welcome news of more potential mergers. George Meiers, who uses both Oracle and Sybase databases, said an Oracle-Sybase merger would create immense integration complexity.

"From a customer standpoint, it would be an issue for code written in each products native language," said Meiers, database administrator at Hallmark Cards Inc., in Kansas City, Mo. "Oracle employs PL/SQL, and Sybase uses Transact SQL, so, I mean, theyre just different languages, different architectures, different databases. To integrate them, youd throw the Sybase [code] away and rewrite it in Oracle basically. There would be very little youd keep of the database design. ... I dont see integration [headaches] as much as a replacement issue."


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