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Oracle ready to take J.D. Edwards, too

Oracle says it will consider buying PeopleSoft even if the proposed merger with J.D. Edwards goes through--and more acquisitions may be in the cards.

Oracle has said it would consider buying PeopleSoft even if the proposed merger with J.D. Edwards goes through--and more acquisitions may be in the cards as it looks to battle competitors such as SAP and Microsoft.

Although Oracle would prefer to buy PeopleSoft on its own, "if it comes down to buying them both, we are not ruling it out," Chuck Phillips, executive vice president at Oracle, said Wednesday at Oracle's AppsWorld conference in London.

Phillips claims that Oracle has been considering a bid for PeopleSoft for more than a year as part of its five-year plan to increase pressure on archrival and market leader SAP.

If the hostile takeover does go through, Phillips estimates Oracle could lose around 30 percent of PeopleSoft's customers to SAP over the next 10 years. "Our goal is to keep all of the PeopleSoft customers, but the highest risk is companies that have SAP financials and PeopleSoft (human resource) software. We are going to do everything we can to prevent (losing those customers), but it is already going on," he said.

Phillips also indicated that Microsoft and "free" open-source applications pose a threat in the longer term: "We have to worry about the whole open-source thing, although it is not a factor today. Five years ago Linux wasn't a factor, but it became one. SAP has a huge market share and has been gaining relative to us and PeopleSoft over the last eight quarters. Together, Oracle and PeopleSoft would give SAP a run for its money and protect us against Microsoft."

According to Phillips, whatever happens with the PeopleSoft deal, more acquisitions are on the way: "As part of our five-year plan, we need more products, distribution channels and partners. You can't develop these things quickly, so you will hear about some acquisitions--there are certain vertical markets that we want to get into."

Phillips thinks it is unlikely that the proposed takeover will cause antitrust problems, which, he said, is one reason why PeopleSoft's board refuses to discuss the deal. "Even if you combine PeopleSoft and Oracle--using IDC numbers--we would have 10.8 percent market share, while SAP would be at 18 percent, so it wouldn't even close the gap," he said.

ZDNet UK's Munir Kotadia reported from London.