SAN FRANCISCO -- Oracle Corp. began a pivotal legal battle yesterday by depicting its $7.7 billion takeover bid for rival business software maker PeopleSoft Inc. as a competitive catalyst that will spur Microsoft Corp. and other major players to pounce on new market opportunities.
Oracle attorney Daniel Wall used his 45-minute opening statement in what is expected to be a monthlong antitrust trial to ridicule a government lawsuit seeking to block the proposed takeover as a case built on ''anecdotes and vignettes."
US Department of Justice attorney Claude Scott drew a different scenario, promising to prove that a combination between Redwood Shores-based Oracle and Pleasanton-based PeopleSoft would drive up prices in a small segment of a market that is too complicated for new rivals to enter.
The government's case is built on the premise that Oracle, Peoplesoft, and Germany-based SAP have cornered the market on the sophisticated software that the largest US companies rely on to run their accounting and personnel departments.
Oracle says that definition is far too narrow because it ignores a wide range of niche players eager to fill market voids and the likely entrance of Microsoft, the world's largest software company.
Scott said the government intends to introduce evidence showing Microsoft doesn't plan an aggressive expansion in the business applications software -- the computer coding used to automate a wide range of administrative tasks.
Wall scoffed at that notion in his opening statement, saying Microsoft showed its true intentions almost as soon as Oracle launched its bid for PeopleSoft on June 6, 2003.
Microsoft began exploring a SAP takeover the day after Oracle jolted the software industry with its PeopleSoft offer, Wall said.
In a statement issued shortly before yesterday's trial began, Redmond, Wash.-based Microsoft confirmed that it held merger discussions with SAP ''late last year." Microsoft said it called off the talks after concluding the deal was too complex and has no plans to resume negotiations.
Oracle views Microsoft's acknowledged interest in SAP as a coup in its case, theorizing that the talks will help prove the software giant wants a bigger piece of the business applications software pie -- a market that has been estimated between $20 billion to $25 billion.