No wonder Oracle czar Larry Ellison wants to acquire the likes of
PeopleSoft. The way his legal defense team sees it, everybody is out to get
him.
The software vendor
wrapped up its final day of defense in an antitrust suit filed by the U.S.
Department of Justice and 11 states. The government sued to block Oracle’s
unsolicited bid to take over the assets and customer contracts of
PeopleSoft, saying the $7.7
billion deal would limit choice and create uncertainty in the enterprise
resource planning (ERP) market.
And this one ended just about as controversially as it started.
Documents produced in court Thursday pointed to an IBM
memo implying that the company was fearful enough of an Oracle/PeopleSoft merger that
it considered launching a “campaign of FUD” (fear, uncertainty and doubt)
against Oracle. The tactics included IBM support of PeopleSoft through a
blanket of analyst, press, customer and regulatory authority statements.
A separate memo suggested that IBM consider acquisitions of middleware
companies as a counterstrike to help prevent Ellison and Co. from edging
into the competitive mid-market.
In another chart titled “Predators’ Ball,” IBM looked at acquiring
Microsoft, Oracle and SAP.
The document was reminiscent of the first day of the
four-week
trial that uncovered plans by Microsoft to acquire
SAP while taking a minority investment in PeopleSoft to make sure they stayed independent.
The trial took many exciting twists and turns, including a media frenzy
when Ellison himself took the stand this week to recount his conversations
with PeopleSoft CEO and former Oracle executive Craig Conway. Oracle lawyers
later dismissed Conway as a witness.
Ellison revealed that Oracle was still considering three or four
other acquisitions of unnamed public companies, including one that
specializes in business-intelligence software, a pure software application
company and a middleware infrastructure company.
In earlier videotaped testimony, Ellison recounted some of the rationale
for acquiring not only PeopleSoft but as many as eight
different others, including Siebel, Lawson and J.D.
Edwards (later acquired by PeopleSoft). Siebel and Lawson had
approached Ellison separately with their own merger proposals.
District Judge Vaughn Walker will now spend the next few weeks looking
over the evidence.
At issue is the role of ERP software, which help companies manage back-office functions such as human
resources or financial services, and how it relates to
Oracle’s traditional database products. No one, not even the U.S. Department
of Justice, denies that SAP AG is the leader in the
marketplace. Oracle is arguing that the ERP definition is too narrow and
must be widened to include Microsoft and IBM, as well as Fidelity and
Ceridian, who are also bending the rules when it comes to ERP, according to
Josh Wenderoff, a consultant for Oracle.
Oracle lead attorney Dan Wall said the government’s stance was very
limiting, and that they only spoke with the Oracle executives whom Oracle’s
defense team had called to the stand.
“The government sued to block Oracle’s acquisition of PeopleSoft because
it would harm competition,” R. Hewitt Pate, assistant attorney general in
charge of the DoJ’s Antitrust Division, said in a statement.
Lawyers for Oracle and the DoJ will file their Proposed Findings of Fact and
Proposed Conclusions of Law on July 8, and their post-trial briefs on July
12. Closing arguments are scheduled for July 20.
