PeopleSoft-Siebel Combo Would Have Been Formidable, Former Oracle President Says

But without this buying spree, Oracle applications would have played second fiddle to other vendors in the marketplace, said Ray Lane, former president of Oracle and now a venture capitalist. While president of Oracle, Lane's candidate for leading the enterprise applications market would have been a combined PeopleSoft and Siebel. The two companies talked about merging in the late 1990s, at a time when Oracle was struggling to win broader acceptance of its applications, Lane said.

Lane, a general partner with the venture-capital firm Kleiner Perkins Caufield and Byers, commented on the application marketplace in wide-ranging remarks during a dinner in San Francisco on Tuesday while the Oracle OpenWorld conference was under way elsewhere in the city. His main focus was one of Kleiner Perkins' investments, Virsa Systems Inc., a real-time compliance software startup.

Both Siebel and PeopleSoft had excellent domain knowledge in their chosen specialties and good sales staffs, Lane said. If they had merged, Siebel, as a leader in customer-relationship-management software, and PeopleSoft, a leader in human-resources management applications, would have made a strong applications contender to Oracle and SAP.

"Craig Conway and Tom Siebel talked but couldn't figure out how to get together. Now Larry is doing it for them," Lane said. Oracle CEO Larry Ellison completed the purchase of PeopleSoft in January and is in the process of acquiring Siebel for $5.85 billion.

"The reason Oracle is buying Siebel is because it was losing in CRM applications," Lane said. Now it has a chance to take Siebel and PeopleSoft's market leadership and make a run at SAP's dominance in applications, he said.

Douglas Laird, senior VP at Virsa Systems, said he worked at Siebel Systems in the late 1990s at the time talks were going on between Siebel founder Tom Siebel and Dave Duffield, PeopleSoft's founder and chairman.