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Automaker says PeopleSoft takeover would hurt

Business software buyers worry that Oracle wouldn't support PeopleSoft users, forcing costly upgrades.

SAN FRANCISCO--A DaimlerChrysler executive testified Tuesday that it would cost the automaker $50 million to $100 million to replace its PeopleSoft system, if the software were neglected under Oracle's watch.

Michael Gorriz, vice president of information technology business systems at the automaker, said an Oracle buyout of PeopleSoft could lead to higher prices for complex business software that DaimlerChrysler already has installed. In particular, the automaker uses PeopleSoft's human resource administration systems to manage tens of thousands of workers in North America and Europe.

He said his fear about price hikes is based on big software contracts his company negotiated with PeopleSoft and SAP over the last several years. Although Oracle didn't bid for those contracts, it represented a third option for DaimlerChrysler, increasing its bargaining power, Gorriz said.

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"I think there was a benefit to having three independent competitors in the market," Gorriz said.

Gorriz's testimony echoed statements made by other witnesses that have testified on behalf of the U.S. Department of Justice. The agency is suing Oracle to stop its $7.7 billion bid for PeopleSoft, alleging that it would leave only German software maker SAP to compete against Oracle in the market for human resource and financial management software for very large corporations.

Oracle, which has yet to present its case, claims that businesses have more than three choices for such software packages.

Witnesses from Nextel Communications and Verizon Communications have made statements similar to DaimlerChrysler's during the trial, which is in its second week. All three companies have purchased millions of dollars of software from PeopleSoft, an investment they worry could go to waste if Oracle failed to maintain PeopleSoft's technology, following a merger of the two rivals.

Oracle has promised to support PeopleSoft's products for at least a decade if it buys the company.