Oracle Warns SAP to Step Lightly

Oracle CEO Larry Ellison responds to archrival SAP's purchase of a third-party applications maintenance provider for PeopleSoft applications "That's our intellectual property, and they should be cautious," he says.

During Oracles semiannual Analyst Day event Wednesday in New York, company CEO Larry Ellison warned archrival SAP to step lightly when it comes to competitive techniques.

Oracle Corp., which acquired PeopleSoft Inc. on Dec. 12 to make it the second largest applications provider in the world behind SAP AG, is fighting hard to win over its 11,000-strong PeopleSoft customer base.

SAP, too, is fighting for that same customer base. The company purchased TomorrowNow Inc. earlier this month, a third-party applications maintenance provider for PeopleSoft applications.

The intent of the acquisition is to provide maintenance support for users of applications by PeopleSoft and J.D. Edwards & Co., which PeopleSoft acquired last year, while they migrate to SAP.

/zimages/4/28571.gifRead more here about SAPs purchase of TomorrowNow.

"SAP has every right to provide support for PeopleSoft applications as long as they dont violate our intellectual and contractual property rights," Ellison said, in measured tones. "It might make it awkward for them. Thats our intellectual property, and they should be cautious."

Oracle and SAP, based in Walldorf, Germany, traded gibes back and forth all day—Oracle at its Analyst Day event, and SAP during its fourth-quarter 2004 earnings call. Both companies are now going head to head in the "stack wars" that align applications more closely with integration and other capabilities in a single architecture.

Oracle, with its acquisition of PeopleSoft, has one goal: to become No. 1 in the infrastructure market.

"We are big. We have 3,000 application developers from PeopleSoft and 5,000 from Oracle," Ellison said. "SAP said what is instrumental is their development team. Instrumental to our strategy is our database team and application server team. I like the size of our shovel versus theirs. As we get into the stack wars ... we have more resources than anybody else."

Oracle outlined a strategy going forward to beat out its competitors—IBM, Microsoft Corp. and SAP—which includes innovation, organic growth and additional acquisitions.

In terms of innovation, executives throughout the day pointed to grid computing, Oracles 10g database and application server, data hubs that extract information and provide a contextual format, and a new product category Oracle created around collaboration that combines content management, Web conferencing, e-mail scheduling and other capabilities.

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