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Oracle Steps Up Pursuit of PeopleSoft

SAN FRANCISCO -- When Larry Ellison puts his mind to something, insiders say he usually he gets it.

So it was no surprise that the Oracle czar had a few comments about his company's current $7.3 billion hostile takeover bid for PeopleSoft .

In a post-keynote Q&A session at the company's OracleWorld 2003 conference here, Ellison fielded questions about the proposal, which is currently under federal review.

"We have our fingers crossed and believe we'll get the OK from the government to go ahead and complete our acquisition of PeopleSoft," Ellison said.

The Redwood Shores, Calif.-based software giant has recently extended its offer a fourth time for Pleasanton, Calif.-based PeopleSoft, which is now set to expire on October 17. While avoiding questions about whether Oracle would pay more for PeopleSoft, Ellison did say the company is "very determined to complete this acquisition."

"And we're very patient," Ellison added.

Oracle Executive Vice President Chuck Phillips is scheduled to appear Wednesday afternoon to specifically address the proposal.

Analysts are split over the feasibility of Oracle's proposal with most tending to say that Ellison will get his way.

But Loomis Sayles and Co. financial analyst Tony Ursillo told internetnews.com he's skeptical about the deal being completed.

"In a nutshell there are too many groups of constituents that are against the merger," Ursillo said. "Customers, competitiors, state AG's are all coming out against Oracle. And as we saw with the Microsoft case, if you have enough people against a company's business practices, the Justice department tends to address those concerns."

Ursillo said his secondary concern is that Oracle will most certainly have to up its price for PeopleSoft now that the company has begun putting its balance sheet to work with a recently announced buyback and

As for customer concerns over integration and customer support, Ursillo says shareholders in the know are unfazed.

"If you take out a fierce competitor and eat up the maintenance revenue, I think that overwhelms the integration risk," Ursillo said.

As for Oracle's other big news this week, Ellison was also upbeat about "Oracle 10g," the company's latest application and database server software that promises to bring "unbreakable" traditional grid computing to the enterprise.

"Already, we have hundreds soon to be thousands of clusters signed up," Ellison said. "It can run on networks with 64 or 128 servers attached to an application instead of eight servers and the technology is getting better and better."

Almost becoming a utility itself, Ellison said Oracle has developed its own outsourcing grid at its Austin, Texas Data Center. The company said its standard configuration is Intel on Linux with 1,000 plus servers currently running with more than 80 terabytes of capacity available. Customers would be given slices of the grid, which could then be allocated towards specific projects such as payroll. "It's capacity on demand," Ellison said. "Plug another server into the grid and the application runs faster and more reliably, and the capacity is inexpensive."

The Oracle 10g platform is expected to debut later this year and Ellison said the company should begin publishing prices for the individual software packages next week.

The company says it is also working with other unnamed vendors on a Grid standard, which it expects to unveil during next month's Global Grid Forum.