Oracle Buys PeopleSoft

The Redwood Shores, Calif.-based company revealed the deal in conjunction with its second quarter earnings, which, in addition to posting strong numbers overall showed 57 percent growth in Oracle's applications business. In a prepared statement Monday, Oracle CEO Larry Ellison called such growth the highlight of the company's financial report, an increase in sales that proves that the PeopleSoft "merger is going to make that applications business bigger and stronger."

Ellison in his statement also pledged support for upcoming PeopleSoft software releases, including the forthcoming PeopleSoft 8 enhancements and the rollout of PeopleSoft 9. He also said the company will continue development of the J.D. Edwards-lineage of applications, which PeopleSoft acquired in 2004. This decision to support the PeopleSoft portfolio, at least as stated today, could sooth some PeopleSoft partners concerns that Oracle would drop product from the portfolio and force them to sell Oracle right away. Over time, it's yet unclear whether that will be the case.

The deal has been tumultuous since the beginning, with vehement opposition from PeopleSoft's former chairman Craig Conway and the company's board of directors. Oracle has changed its sale price proposal many times (the original deal would have amounted to $7.7 billion), and the two companies have duked it out in court over the legality of the deal. In October, the scales tipped a bit in Oracle's favor when Conway was unexpectedly fired by a PeopleSoft board that cited a "loss of confidence" to lead the company. Duffield, the original founder of the company, has been running the company since then.

The combined company makes for a No. 2 giant in the enterprise applications space, which is dominated at present by German powerhouse SAP.

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