Oracle exec hints at more bids to come

Computerworld - LONDON -- Oracle Corp.'s aggressive bid for PeopleSoft Inc. is just the beginning of what may signal a new strategy for the company where it quickly gains ground in the slipping enterprise applications market by scooping up competitors, an Oracle executive hinted today.
"If consolidation is going to happen, we'd rather drive it than watch it," said Chuck Phillips, Oracle's executive vice president in the office of the CEO, during a press briefing at the company's AppsWorld conference in London.
Phillips, who was recently recruited to Oracle after years on Wall Street as an analyst covering enterprise software, confirmed that his addition to the company helped mark the strategy change. His comments came one day after Oracle Chairman and CEO Larry Ellison left the door open for a further increase in its already sweetened bid to acquire PeopleSoft.
"Never say never," Ellison said during a keynote address at AppsWorld yesterday (see story) when asked about the possibility of an increase to Oracle's $6.3 billion unsolicited offer for PeopleSoft.
According to Phillips, Oracle believes that there needs to be a consolidation in the market given the slowed growth in enterprise application sales in recent years. However, he shrugged off claims recently made by PeopleSoft's board that a merging of the two companies would raise antitrust concerns, saying, "We think there are plenty of players out there."
Microsoft Corp. is also becoming a more active participant in the market and the future strength of open-source competitors can't be ruled out, he said.
PeopleSoft is still railing against the proposed Oracle buyout, and PeopleSoft's accelerated acquisition of J.D. Edwards & Co. has only complicated matters for the software vendor. Oracle still hasn't decided if it wants to take on J.D. Edwards along with PeopleSoft, but it hasn't ruled out the option either, Phillips said.
But he noted that J.D. Edwards is culturally different from both Oracle and PeopleSoft and that there are "incremental risks" in taking on both companies at once.
In a related development, a J.D. Edwards users group threw its support around the J.D. Edwards/PeopleSoft merger while also opposing the Oracle bid for PeopleSoft.
"We believe the Oracle deal would significantly reduce the number and quality of choices for consumers of enterprise software and, ultimately, substantially harm the members of our organization," said David Watts, president of the Quest users group, in a statement. The announcement was made based on the results of the group's online poll, which showed that 80% of respondents supported J.D. Edwards' merger with PeopleSoft.
Currently, Oracle is concentrating on getting PeopleSoft customers and shareholders to support the buy, Phillips said. In private conversations with shareholders, Oracle representatives have expressed "surprise and annoyance" that the PeopleSoft board refuses to meet with Oracle, he said.
"In this era of corporate governance and disclosure, it's almost unheard of to not at least meet with us," Phillips said.
In addition to direct meetings, Oracle is targeting PeopleSoft customers and shareholders through a high-profile media campaign. The company ran an ad on the front page of today's Financial Times, declaring its commitment to support PeopleSoft products as well as to migrate PeopleSoft customers to Oracle's E-Business Suite via free module-to-module upgrades.
"We need more products, more distribution partners and more channels. That's part of our plan over the next five years," Phillips said.
And to gain all those elements quickly, more acquisitions seem to be on Oracle's agenda. "Oracle, and Larry in particular, [have] changed [their] views on acquisitions in the last year," Phillips said.

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