Ray Lane, Oracle’s ex-COO, said yesterday Oracle needed to buy PeopleSoft to in order to regain ground in the enterprise applications business, which the company lost following PeopleSoft’s purchase of JD Edwards.
However, Lane predicted a successful Oracle bid would also reduce choice for customers, as the ERP market would be dominated by Oracle and SAP AG.
A PeopleSoft purchase would give Oracle and SAP a combined 75% share of the market, leaving other companies with just 25%, according to Lane.
Lane joined Oracle in 1992, rising to become the company’s COO for a four-year period. He quit in June 2000 and is now a partner with Silicon Valley venture capitalist Kleiner, Perkins, Caufield & Byers.
Speaking to press at the Open Source Business Conference (OSBC) 2004, Lane said Oracle faced a tough battle against antirust regulators in the US and Europe, who are concerned about the deal’s implications on competition and customer choice.
Oracle is scheduled to face the US Department of Justice (DoJ) in court over the deal on June 7. The European Commission’s competition watchdog, meanwhile, has voiced its opposition to Oracle’s purchase, with a final decision expected in May.
The crux of Oracle’s problem, according to Lane, is that while the acquisition of PeopleSoft benefits Oracle, it does not help customers.
Oracle is organically losing market share in the applications business. With the JDE acquisition, Oracle is now number two. SAP owns over half of the industry, Lane said.
If you can use profits from the database business to fuel growth in another market, it’s a good idea. For the customer, it’s a bad idea, putting the ERP business in two people’s hands.
This article is based on material originally published by ComputerWire
