Oracle's Acquisition of PeopleSoft: A New Era of Competition in Enterprise IT

Strategic Insights -

The acquisition of PeopleSoft by Oracle Corp marks the beginning of a new era of competition in the enterprise information technology market, where business-automation software suppliers SAP, Oracle, IBM, and Microsoft Corp dominate the landscape. The deal, valued at $10.3 billion, will create the second-largest enterprise application software vendor, after SAP, and is expected to spark a wave of mergers and acquisitions in the industry. Oracle's chairman and CEO, Larry Ellison, has stated that the acquisition will give the company the resources and customers needed to rival SAP and become a leader in the enterprise applications market.

Key Takeaways:

  • The acquisition of PeopleSoft by Oracle will create a second-largest enterprise application software vendor, second only to SAP.
  • Oracle's chairman and CEO, Larry Ellison, has stated that the acquisition will give the company the resources and customers needed to rival SAP and become a leader in the enterprise applications market.
  • The merger is expected to spark a wave of mergers and acquisitions in the enterprise information technology market, with companies such as Siebel Systems and BEA being potential targets.
  • According to Yankee Group analyst Michael Dominy, the industry's consolidation is the result of a maturing market for technologies used inside the enterprise.
  • Oracle's software revenues for the quarter to November 30 were up 13% to $2.22 billion, on the strength of its database and applications sales.
  • The company's E-Business Suite, which stacks together its ERP, CRM, and SCM technologies, is a key driver of its growth and competitiveness in the market.
  • Research firm Gartner has urged corporate IT buyers not to be tempted by "merger-related discounts" on products that they had not evaluated thoroughly.

Statistics:

  • The acquisition of PeopleSoft by Oracle is valued at $10.3 billion.
  • Oracle's software revenues for the quarter to November 30 were up 13% to $2.22 billion.
  • The company's E-Business Suite has grown its applications business by 57% in the quarter.
  • According to Forrester Research, a temporary competitive vacuum will occur after Oracle's victory, allowing SAP, Microsoft's Business Solutions unit, and other ERP and best-of-breed vendors to see increased opportunities to win deals and reposition their offerings.

Sources:

  • "Oracle acquires PeopleSoft in $10.3 billion deal" by Bien Perez.
  • "Oracle's Ellison: 'We're going to give SAP a run for their money'" by Bien Perez.
  • "Consolidation in the Enterprise Software Market: Impact and Future Directions" by Michael Dominy, Yankee Group.
  • "ERP Market Research Report" by Forrester Research.
  • "Gartner Urges IT Buyers to Resist Merger-Related Discounts" by Gartner Research.