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2/3/2005
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IDC: Oracle Expands its Applications Market Footprint with PeopleSoft Acquisition

The study finds that the merger gives Oracle a significantly wider market footprint in applications on a worldwide basis.

In a newly released study, IDC analyzes the expanded applications market footprint gained by Oracle as a result of the PeopleSoft acquisition. In the analysis, IDC determined pro forma market share for Oracle by combining 2003 actual market share information for Oracle and PeopleSoft. The results suggest that had the merger with PeopleSoft taken place in 2003, Oracle would have become the leading firm in enterprise applications in North America from a market share perspective. The study also finds that the merger gives Oracle a significantly wider market footprint in applications on a worldwide basis, and particularly in human capital management, financial applications, procurement, and customer service/call center.

"Although it is interesting that in certain markets and regions Oracle has gained considerable market penetration due to the PeopleSoft acquisition, the more fascinating question concerns what Oracle will do with that acquired market share going forward," said Evan Quinn, group vice president of Applications research at IDC. "To not only retain customers, but also expand its market share post-2005, due to the highly competitive nature of the enterprise applications market and competitive switching offerings to try to dislodge PeopleSoft and J.D. Edwards customers, Oracle needs to take special care of PeopleSoft's customers during 2005. In particular, Oracle has the most to gain or lose in the human capital management and financial applications markets."

Another key assessment in this study is the acquisition's impact on Oracle's regional market presence. Using 2003 market statistics, in North America, Oracle would have bypassed SAP in enterprise applications/CRM revenue as a result of the PeopleSoft acquisition, though SAP would have retained a wide lead in Europe. In terms of Asia/Pacific, Oracle would not have gained as much of a boost as it does in North America from PeopleSoft, but it would have enlarged its relative footprint to SAP and Siebel in this region, more so than in Western Europe.

In this study — entitled “The PeopleSoft-Enlarged Oracle Applications Market Footprint - Gains and Risks (IDC #32764)” — IDC takes its most recent historical vendor revenue and resulting market share in the enterprise applications and CRM markets, which reflect CY03 results, adds together Oracle and PeopleSoft revenue, and regenerates market share and market rank for the applicable markets in order to assess the impacts of the merger on the marketplace. IDC will update its market share statistics for 2004 later in 2005, after all applicable firms have released their financial results for 2004.

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