Oracle's PeopleSoft struggle taking surreal twists

By Stuart Finlayson

First it was Oracle saying that it would turn to arch enemy Microsoft for help in its appeal to overturn the U.S. Department of Justice's decision to block its PeopleSoft takeover bid. Now SAP has come out in support of its rival by criticising the DoJ ruling – an unlikely alliance indeed. It's all getting a bit strange in the struggle for control of PeopleSoft. Or is it?

On the face of it, for Oracle to get any kind of backing from either Microsoft or SAP does seem rather bizarre, not to mention ironic, given the fact that Oracle was one of Microsoft's harshest critics when the software giant was itself under the scrutiny of antitrust regulators, while SAP is the biggest player in the enterprise application software space, and surely wouldn't want its nearest rival to get stronger?

The reality is quite different though. While it is true that Oracle is seeking information from Microsoft as to its presence in the enterprise application software market in support of its argument against the DoJ's decision that an Oracle takeover of PeopleSoft would only leave Oracle and PeopleSoft as the two major players in the market, it is highly unlikely that Microsoft will be all that keen to co-operate with one of its greatest adversaries. It is likelier that Oracle will have to subpoena Microsoft to get it to testify. So not exactly bedfellows just yet.

As for SAP's stance, analysts believe that SAP is keen to see Oracle continue to pursue this deal, as it stands to gain customers from the ongoing confusion surrounding its two biggest rivals. In any case, SAP is so far ahead of the rest of the market, even if Oracle managed - against what must be pretty long odds now – to successfully take control of PeopleSoft, it would not be overly concerned. Indeed, SAP's hierarchy have indicated in the past that they would welcome such a move, as they feel it would present them with an opportunity to grab those customers who are unhappy with PeopleSoft changing hands.

It would seem then that these IT rivals have not suddenly turned all warm and fuzzy and are still looking out for number one!

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U.S. DoJ to block Oracle's PeopleSoft bid