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FEBRUARY 3, 2005
How Oracle Beat Justice in Court [Page 2 of 2]
Q: What did you think of Justice's case? A: I thought they had a strong opening move. But once we responded, they didn't have a lot of strong counters. What I mean by that is from the time even before the case was filed and I was trying to figure out if we could win or not, it was pretty apparent to me that the Justice Dept. would have no trouble at all putting on a bunch of witnesses who would say that if you are a big multinational company, the three best choices were Oracle, SAP, and PeopleSoft. They would get the first serve in and it would be a good serve. The problem was that we would have a good return, which was, "Yeah, but there's lots of big companies using other software companies, too." I don't think they had very many good shots after that. They didn't have a real solid answer for why it was if these were the only three games in town that the likes of Johnson & Johnson (JNJ ) and McDonald's (MCD ) and Justice itself were turning to other companies. And I really don't think that throughout a month of trial they ever really figured out what to do with that. Not that I would have done anything better with it if I were in their position. It was just a difficult fact for them, and failing to provide a really good explanation that was consistent with their theory of the case, I think, laid the foundation for the result. Q: Let's turn that around. What was the weakest point in your case? A: I think companies tend to fixate on just a few competitors that they define the world around, and they benchmark themselves against that. And Oracle was no different. SAP was the big dog in town. PeopleSoft was right across the bay. From an internal standpoint, there was a lot of evidence of how much we fixated on PeopleSoft and SAP. I think that we were able to overcome that. But looking at it from a practical matter, I can tell you I'm looking at two or three deals now, and every one of them has the same phenomenon -- that the companies tend to focus their marketing and strategic thinking around a very small number of competitors. Q: That's true. But some of Oracle CEO Larry Ellison's more provocative comments early on in the takeover fight must have presented some challenges to you. A: Let me give you a great example of that because it's certainly true, and the one that I'll cite is, "Best-of-breed only works in dog shows." Justice played it constantly. That's a line where he lampoons the best-of-breed solution as an alternative to a suite like you can get from Oracle or SAP. My response is, "If he's not concerned about best-of-breed, then why does he have a shtick about it?" Q: That said, did you hesitate to put Larry on the witness stand? A: Not at all. A lot of people have asked me that. Larry Ellison is one of the most articulate spokesmen of his view of the world that you can find. He's the vision guy at Oracle. And this deal was all about vision. He was the best person to tell that story to Judge Walker. That was the main thing I wanted him to do. I wanted him to get up there and say, "This is why I want to buy this company. It's not about jacking up the price to customers. It's about retaining the PeopleSoft customers. It's about competition from Microsoft and others in the future," and he's the guy who has to tell that.
BW MALL
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