The US Justice Department and Oracle Corp on Friday gave a "technology tutorial" to the federal judge who will hear the government's suit to block Oracle's $7.7 billion hostile bid for rival PeopleSoft Inc.
Although most of the court session was devoted to a technical explanation of how Oracle's and PeopleSoft's software products work, both sides also foreshadowed the arguments they are expected to make when the antitrust trial begins in June.
The trial is expected to centre on whether Oracle's acquisition of PeopleSoft would crimp competition and drive prices higher in the market for enterprise software.
The two sides have skirmished over how to define the market.
PeopleSoft, based in Pleasanton, California, has claimed that Oracle, based in Redwood Shores, California, launched its takeover bid last June to disrupt the market for business application software and harm its own business.
The Justice Department filed suit in February to block the deal after concluding that it would hobble competition in the market for software sold to large businesses to manage finances, human resources, sales forces and other functions.
Oracle has dismissed those concerns as unwarranted, accusing the department of "gerrymandering" the market to make it look as though it includes only three companies: Oracle, PeopleSoft and Germany's SAP AG. Oracle contends that a myriad of smaller companies can also compete for big customers.
Rick Bergquist, PeopleSoft's chief technology officer, told Judge Vaughn Walker of the US District Court for Northern California, "Generally what I find is it comes down to two or three players" in the enterprise application space.
Bergquist's presentation to Judge Walker on behalf of the government mentioned just a few software companies, including Oracle, PeopleSoft, SAP, International Business Machines Corp and Microsoft Corp.
By contrast, a presentation by Ron Wohl, who heads applications development for Oracle, emphasised more software vendors in the enterprise applications market. One of his slides described the number of enterprise applications software companies as "many vendors."
"There are specialised suppliers of just about every type of software," Wohl said, adding that because there are so many different software vendors' products found in large companies, there is a great need for systems integration firms to stitch together the different programs and databases.
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