Merged Oracle/PeopleSoft 'could boost' competition

SAP has claimed that competition in the enterprise application market would increase if Oracle were to acquire PeopleSoft.

Yesterday SAP testified in the court case brought by the US Department of Justice (DoJ) to block Oracle's attempted $7.7bn hostile takeover of PeopleSoft.

"We anticipate the same level of competitiveness that we have today, if not greater," said Richard Knowles, SAP's vice president of operations for North America, when asked by Oracle's lawyer about the effects the acquisition would have on pricing.

Among the seven largest enterprise application software makers in the US, SAP claims to have a 34 per cent market share. PeopleSoft and Oracle combined would have a 38 per cent share.

"[This] would mean that Oracle would become the number one player in the US. That's when you create a much more competitive environment," said Knowles.

"Oracle will do anything to keep that position. And we at SAP will become more competitive."

But when asked by Judge Vaughn Walker how he felt about the prospect of competing against a merged Oracle and Peoplesoft, and SAP losing its leading position in the US, Knowles replied: "Neutral."

The DoJ argues that the takeover would decrease competition in the enterprise applications market and increase prices, because it leaves only Oracle and SAP as major players.

A spokesperson for the DoJ later downplayed the relevance of SAP's testimony, claiming that only customers and users are in a position to judge the impact of such an acquisition.