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Mar 05, 2004 1:22 am		Oracle 4 PeopleSoft
Melanie Hollands		The anti-trust issue with Oracle / PeopleSfot does not apply to ALL of Oracle's lines of business and is, therefore, a bit harder to see from the outside. The crux of the anti-trust issue is with the apps business - both ERP and CRM. Removing PeopleSoft from the ERP business (particularly now that it bought JD Edwards) leaves SAP with a likely more dominant share of the business than today. Looking at the high-end of the market, Oracle has about 35-40% right now and this would increase to >50% market share of the high-end if Oracle succeeds at buying PeopleSoft. There are many that will not buy the PeopleSoft product from "Oracle / PeopleSoft", even if Oracle swears it will continue to "support" it. Folks will assume that Oracle will underinvest in the further development of the app - and no one wants to invest in ERP software that is bound to become obsolete in 4-5 years. Oracle buying PeopleSoft means death to the CRM portion of the business and concentrates the call center software market squarely in the hands of Siebel. Same reason. If the market is defined a bit more broadly to include the upper mid-market for ERP and to a lesser extent CRM, then the concentration picture is a little bit less bad - but not that much. Oracle would most likely benefit from this. The Clayton Act doesn't require a market become a monopoly to act to bar a merger. It only has to have a bad impact on the competitive dynamics. And this is an important reason why the anti-trust issues will (in my opinion) prevail in the case of Oracle / PeopleSoft. Cheers Melanie Hollands President Koala Capital, LLC Private Reply to Melanie Hollands (new win)

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