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Oracle looks beyond PeopleSoft

The database giant promises that developing business applications will remain one of its top priorities--with our without its acquisition of PeopleSoft.

SAN DIEGO--Oracle has promised that developing business applications will remain a top priority for the company--with our without its acquisition of PeopleSoft.

"Our applications business was never contingent on getting PeopleSoft," Charles Phillips, Oracle co-president, told a group of reporters Tuesday at the annual Oracle AppsWorld conference here. The PeopleSoft bid "was an opportunity we tried to take. It was opportunistic."

With its $7.3 billion bid to buy rival PeopleSoft, the Redwood Shores, Calif., company signaled a more serious focus on business applications, which have long played second fiddle to the company's larger database software unit. But eight months and many setbacks later, Oracle's buyout plans appear uncertain, leaving some to question the company's commitment to the unit, should it suffer defeat in its efforts to acquire PeopleSoft.

Moreover, Oracle has said that in addition to PeopleSoft--or perhaps as an alternative--it's interested in acquiring companies in other markets, including technology infrastructure maker BEA Systems.

Pledging an ongoing dedication to applications, Oracle Chairman Jeff Henley said during a keynote speech that the company has nearly doubled the size of its applications development staff over the past several years. The group now has more than 5,000 software developers. He also underlined the fiscal health of Oracle's applications business, which was in decline until recently. The company reported that revenue from the unit climbed 27 percent in the most recent quarter, compared with the same period a year earlier.

"We will continue to make investments in both the technology and application space," Henley said.

"There will be fewer and fewer players, and certainly we will be one of" those left standing, he added, touching on an oft-repeated Oracle claim that mergers will shrink the business software field dramatically in the coming years.

Phillips offered few new insights into the status of Oracle's pursuit of PeopleSoft. The company is waiting for regulatory approval from both the U.S. Department of Justice and the European Commission, which are still more than a month away from issuing decisions. The company is also fighting for control of PeopleSoft's board to overturn antitakeover measures PeopleSoft management enacted. "The gating factor right now is regulatory approval," Phillips said.

Asked whether Oracle plans to raise its $19.50-a-share bid, Phillips called the issue "irrelevant," despite the fact that PeopleSoft shares have been trading above the bid price for months. On Tuesday, they closed at $22.98.

"There are many miles to go before we get to that road," he said.

Phillips also discussed a renewed effort to improve customer service. Oracle has kicked off a customer outreach program that will be an "important push" for the next 12 months, he said. As part of the program, the company is conducting architectural assessments, a process in which Oracle examines customers' deployments and recommends money-saving adjustments.