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Oracle says Siebel would be its second choice

Oracle says Siebel would be its second choice

If Oracle's takeover of PeopleSoft falls through, the software maker may go after its second choice: Siebel Systems.

In its quest for growth, Oracle had Siebel second on its wish list, Oracle chief executive officer (CEO), Larry Ellison, said in a videotaped deposition played in federal court in San Francisco.

Ellison's deposition was part of the US government's case to block Oracle's $US7.7 billion hostile takeover of PeopleSoft.

He was asked if Oracle would be able to compete in the enterprise software arena through acquisitions other than a merger with PeopleSoft.

Ellison replied that Oracle would be competitive regardless of an acquisition, but that acquisitions would help and that a PeopleSoft takeover would allow it to compete most effectively.

"They [PeopleSoft] have got ... a larger and more important customer base than our second choice, which would be Siebel," he said. "I think I publicly said that Tom Siebel came over to my house and tried to sell me Siebel Systems."

Siebel sells customer relationship management (CRM) software. PeopleSoft sells a range of business applications, including software that allows businesses to manage human resources, finances and supply chain and customer relations. Siebel Systems could not be immediately reached for comment.

At an earlier point in his testimony, which was recorded last month, Ellison also fingered middleware vendor BEA Systems as a possible target for Oracle and contradicted what he was about to say later.

"I think PeopleSoft and BEA are much more attractive ... than Siebel," he said.

Earlier, Oracle president, Safra Catz, in a deposition played back from videotape testified that Oracle had courted J.D. Edwards shortly before launching the PeopleSoft bid.

Oracle's chairman and chief financial officer, Jeff Henley, in yet another deposition on tape, said Oracle had considered buying Lawson Software.

Oracle wants to acquire other vendors to expand its customer base.

In PeopleSoft's case, Oracle expected an acquisition would allow it to sell more of its database and application server software to PeopleSoft customers who may currently run competing products from vendors including Microsoft and IBM, Ellison testified.

The US Department of Justice (DOJ) said an Oracle-PeopleSoft merger would stifle competition in the market for high-end human resources and financial management applications, resulting in higher prices.

Oracle said there were numerous other competitors, and that other vendors such as Microsoft could enter the market at any time.

As part of its case, the DOJ also called California Institute of Technology professor Preston McAfee, a witness Oracle had tried to get excluded.

McAfee reviewed Oracle's discounting practices and found the vendor's prices were between 13 per cent and 26 per cent lower when competing against PeopleSoft.

McAfee also testified that Oracle's prices would probably rise between 5 per cent and 30 per cent if PeopleSoft was not competing.

Oracle attorney, Dan Wall, attacked McAfee's testimony. Under McAfee's merger theory prices would always go up, Wall argued.

The DOJ is expected to informally rest its case this week.

Oracle in the coming two weeks is scheduled to present its case.

Judge Vaughn Walker will decide the case, probably in August or September.


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