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Microsoft competes, Oracle insists

Microsoft competes, Oracle insists

Microsoft Corp. competes in the enterprise applications space, Oracle Corp. said in a white paper distributed one day before a top Microsoft executive is scheduled to testify to the contrary in the U.S. government's case to block Oracle's takeover of PeopleSoft Inc.

The case hinges on the definition of the market for high-end human resources and financial management applications. The government argues that an Oracle-PeopleSoft merger would stifle competition, resulting in higher prices, because Oracle, PeopleSoft and Germany's SAP AG are the only options for buyers.

Oracle says there are numerous other competitors, including Microsoft, the world's largest software maker. In its white paper, handed out to reporters Tuesday, Oracle says Microsoft already competes and will become an even bigger foe when it completes the rebuilding of its applications onto a single code base, an effort known as Project Green.

The white paper was written before the revelation at the beginning of the trial two weeks ago that Microsoft had approached SAP late last year for a possible takeover. The talks ended several months ago after Microsoft decided the deal and the post-union integration would be too risky.

Oracle lawyers have pounced on the news, offering Microsoft's talks with SAP as evidence of the competitive nature of the business software market. The U.S. Department of Justice (DOJ) spun it around, saying that Microsoft's overture shows the software giant is not currently an enterprise application software player and that there is a high barrier to entry.

Microsoft Corp. Senior Vice President Doug Burgum is scheduled to take the stand Wednesday as the government's final witness in the case. Burgum, who heads Microsoft Business Solutions, is expected to testify that Microsoft is aiming for small and medium-sized businesses, not the large and complex enterprises to which SAP, Oracle and PeopleSoft sell their products.

"Our focus has been and continues to be on the small and mid-size market," Microsoft spokesman Jim Desler said Tuesday. As for Burgum's testimony, Desler said the executive will respond to all questions that are asked.

Oracle argues not only that Microsoft plans to sell to larger businesses, but that it already does so. The white paper lists several multibillion-dollar, multinational companies that use Microsoft software to run their businesses, including office supplies vendor Esselte Corp. and theme park company Six Flags Inc.

Microsoft began edging into the ERP market by purchasing Great Plains Software of Fargo, North Dakota, in 2000 and Navision of Vedbaek, Denmark, in 2002. The companies were combined to form Microsoft Business Solutions.

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