OAKLAND, CA—If, soon after its 2004 acquisition of PeopleSoft, Oracle Corp. had been willing to license to rival ERP vendor SAP AG the rights to its applications intellectual property, the price tag would have been about $4 billion, Oracle CEO Larry Ellison testified in court today.
Opening the second week of Oracle’s copyright suit against SAP in U.S. District Court here, Ellison said that figure was based on his estimate that, with access to Oracle’s intellectual property, SAP and its then-recently acquired TomorrowNow third-party maintenance unit would have won over between 20% and 30% of Oracle’s PeopleSoft and JD Edwards installed base. Ellison also estimated that SAP/TomorrowNow could have been expected to siphon off 10% of Oracle’s Siebel customer base, after Oracle acquired Siebel and SAP subsequently launched Siebel third-party support through TomorrowNow.
“They were the market leaders, and they had very high credibility,” Ellison said. “If they had access to all of our engineering, they could have made a credible offer to our customers.”
Speaking before a packed courtroom and wearing his customary sport coat and black turtleneck, Ellison said his estimate was based on 30% of the $11 billion Oracle paid for PeopleSoft, plus 10% of the $6 billion Oracle paid for Siebel.