International Business Machines Corp (IBM), the world's largest computer maker, might lose millions of dollars in sales if Oracle Corp's hostile takeover bid for PeopleSoft Inc succeeds, a lawyer for Oracle said.
On the third day of the US Department of Justice lawsuit to block the US$7.7 billion takeover, Oracle attorney Greg Lindstrom cited internal IBM documents that estimate the company may lose millions in database software sales and systems integration consulting revenue if Oracle buys PeopleSoft.
Lindstrom used the documents to counter arguments from an IBM executive who supported the Justice Department's case. The US says that prices for software that large companies use to run financial and human resources functions would increase if Oracle, the No. 3 business software supplier, can buy No. 2 PeopleSoft.
"Let me be blunt. IBM and Oracle are competitors. Oracle's largest competitor in the database business is IBM," Lindstrom said yesterday at the month-long trial in San Francisco.
The IBM documents were introduced while Lindstrom questioned Nancy Thomas, an executive at an IBM consulting business that is hired by companies to help them select and install software.
Thomas was testifying on behalf of the government about how she recommended software from Oracle, PeopleSoft or No. 1 ranked SAP AG of Germany to most customers.
"IBM's concern, is it not, is that if" Oracle takes over PeopleSoft, it would lose millions of dollars in database business, Lindstrom said.
"No one has shared that concern with me personally," Thomas said.
Earlier, Thomas told the court that 90 percent of IBM's "financial management solutions" consulting business focuses on implementing software from PeopleSoft, Oracle and SAP.
Lindstrom sought to show that IBM had different motives for opposing the takeover. IBM overtook Oracle in 2002 as the world's largest maker of database software. IBM has a 35.7 percent share of the US$7.1 billion database market.
Oracle is No. 2, with a 32.6 percent share, researcher Gartner Inc said.
"If IBM were to recommend Oracle financial software, that means the client would have to run Oracle's database," Lindstrom said.
Oracle's software runs only on Oracle's database products and PeopleSoft's products work with IBM's database as well as those from Oracle and Microsoft Corp.
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